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> The whole point of insurance is to distribute risk evenly over a specific population. First time I've seen that line, and it doesn't make much sense to me at
by sudhirj 8y ago
> The whole point of insurance is to distribute risk evenly over a specific population.
First time I've seen that line, and it doesn't make much sense to me at all - in my mind insurance has always been a hedge against risk. If my family needs a million dollars to live well if I die, and my probability of death this year is 0.1%, $1000 is what I'd pay for life insurance. The art is calculating the probabilities correctly, and maybe adding a small fee for the trouble, but anyone with the capital could offer insurance even for a single customer, no?
- reacweb 8y agoIf you are insured, your probability of death is probably greatter than when you are not insured. Even not considering murder, you will probably take more risks if you know your family is protected.
- skate22 8y agoWhat if you can't afford the operation because you're uninsured. Also i have insurance to mitigrate the risk of big loss, not increase it
- zAy0LfpBZLC8mAC 8y agoThe fact that someone can do that doesn't change the social function of the actual thing. Actually, that is essentially how an insurer gets started. Obviously, you can't start selling insurance to your first customer if you can't pay them out the next day if needed, so you need some capital to get started. And once you have the risks figured out, there really is no reason why you shouldn't keep selling insurance to the next ten customers as well. And the next thousand customers. And the next ... --well, the point being, if you have done your math right, you are now distributing the risk evenly, with some profit margin for you.