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It should not be covered because there is a statement in the policy that it is not covered. The only controversial thing here is whether or not this actually wa

It should not be covered because there is a statement in the policy that it is not covered. The only controversial thing here is whether or not this actually was an act of war, and that is something the insurance company must prove.

k__ 8y ago
What does prove even mean in that context?
- deleted 8y ago
  [deleted]
- benologist 8y ago
  That the insurance company feels comfortable nobody will punish them for stealing your money. Their business model is who can they get away with not helping really.
  - jaggederest 8y ago
    Actually most insurance companies pay out more money in losses than they take in via premiums. The real business models for insurance companies isn't underwriting profits, it's arbitraging the time value of money (pay premiums now, pay claims later) via investing the float.
    - a1369209993 8y ago
      That's not more money though; that's less money exchanged into a weaker (more inflated) currency. Four pounds isn't more than three kilograms just because the number is larger.
    - nradov 8y ago
      That might have been true at some point in history but is no longer possible in a ZIRP environment.
  - jaredklewis 8y ago
    This is a very strange point of view. If they are stealing, they aren't doing it very well! Insurance companies tend to only have profit margins around ~5%. And what does that mean about insurance buyers? Are they all idiots for buying insurance, since it just means their money will get stolen? Insurance companies can't afford to pay out any more than they need to; doing so would raise premiums for all customers and make their products less appealing in a fairly competitive industry. Whether NotPetya was an "act of war" (a legal term of art), is a legitimately interesting discussion! To have it reduced to "those insurance companies are stealing" is depressingly simplistic.
    - benologist 8y ago
      That ~5% worked out to almost 4 billion profit last year for my healthcare company. They are incentivized to decline coverage as much as they possibly can and have a long history showing they want to. https://en.wikipedia.org/wiki/Anthem_(company)#Controversies https://en.wikipedia.org/wiki/Anthem_(company)#Controversies The DMHC randomly selected 90 instances where Anthem Blue Cross canceled the insurance of policy holders who had been diagnosed with costly or life-threatening illnesses, to find how many of these cancellations were legal. The agency concluded that all these cancellations were illegal. Falling on "it was an act of war" when no government has declared such a war is nothing more than creative accounting. (this is also Anthem) On 17 March 2010, WellPoint announced it was reclassifying some of its administrative costs as medical care costs in order to meet new loss ratio requirements under the health care law, which requires insurers to spend at least 80% or 85% of customer premiums on health care services, depending on the type of plan.[5 https://www.quora.com/How-many-people-die-in-the-US-each-year-from-denied-medical-insurance-claims https://www.quora.com/How-many-people-die-in-the-US-each-yea... https://www.nytimes.com/2007/03/26/business/26care.html https://www.nytimes.com/2007/03/26/business/26care.html https://www.thedailybeast.com/my-insurance-company-killed-me-despite-obamacare https://www.thedailybeast.com/my-insurance-company-killed-me...
      - jaredklewis 8y ago
        Yes, they are profit making companies. Those profits are distributed to investors, in the case of Anthem, that's mostly institutional investors, i.e. people's retirement funds. What's your point? Anthem's 4% margins are well below the S&P 500 average of 11%. If Anthem was simply stealing surely their margins would be a little higher? And who are the idiots buying Anthem insurance? I mean, if it was just stealing, everyone would take their money somewhere else, no? Of course the truth is not simple, but rather complex. Most any company has a "Controversies" section on their wikipedia page. Toyota once shipped a car with bad brakes. What does it mean? Are all companies simply stealing? Yes, insurance companies are incentivized to decline coverage, so that they can lower premiums (to compete) and increase margins. But they are also incentivized to payout because if they don't, people stop buying insurance. > Falling on "it was an act of war" when no government has declared such a war is nothing more than creative accounting. (this is also Anthem) Quite certain that is not how the courts will interpret the term "act of war." In international law, for example, there is certainly no precedent that a government declaration of war is required for an act to be considered an act of war. Any aggressive act can potentially be considered an act of war. If Russia decided to blow up a bunch of US freighters, sans-declaration of war, fairly certain the act could pass as an act of war.
- raincom 8y ago
  I think Courts will decide on that matter. The insurance company says some govts claim that these are actions perpetrated by Russia. If courts accept it, they have to decide do these come under the scope of "acts of war". Courts will ask that insurance company to provide more than a newspaper claims. So, they will ask for evidence whether Russia indeed committed these.
- jaredklewis 8y ago
  In this context, "prove" means convince a judge of the Cook County court that the NotPetya ransomware was not an ordinary cyber attack, but rather a Russian act of war against the US. I think Zurich's point of view is not untenable. If a Russian military submarine had sunk a Mondelez freighter, would it be an act of war? I think possibly. What if a Russian military cyber hacking squad steals their money with ransomware? Less clear, but still certainly a belligerent act on Russia's part. Of course Zurich will need to present a convincing case that the cyber attack was committed by the Russian government. Will be an interesting case.
anigbrowl 8y ago
You're just restating the insurance company's position. The issue is why don't insurance companies want to cover people against war, and the answer is that that's when the people you relied on take the money and run because there's a decent chance that their erstwhile customers will die (physically or financially) and never be able to come after them.
- Ntrails 8y ago
  They will absolutely cover acts of war. It is simple - just ask them to and hand over the extra money. There is essentially no risk that cannot be insured, but the standard pricing is going to exclude a bunch of tail risks that would be prohibitively expensive to include by default
  - jeremyjh 8y ago
    I think there are probably risks that cannot be insured in practice. One of the particulars of war is that it might destroy many insured parties at once, overwhelming any conceivable insurance syndicate. Yes, you could perhaps sell a few policies with limited coverage, but if you cannot credibly calculate the probability of the event occurring it seems hard to imagine there is a price that will make sense to both parties.
    - Ntrails 8y ago
      That's no different to any other catastrophe. Earthquake or tsunamis etc. > it seems hard to imagine there is a price that will make sense to both parties. The price you'd have to pay is likely to be extremely high due to the value at risk and level of uncertainty, and yes insurance companies would also be modelling their exposure and stop selling at some point. A single tanker, for example, could almost certainly find a price at Lloyds.
- jaredklewis 8y ago
  As have been pointed out by others, insurance companies are more than happy to cover acts of war in exchange for higher premiums. Some insurance policies cover acts of god (extremely rare disasters), some don't. They are priced accordingly. I'm sure it is no different with acts of war or anything else. Insurance companies pretty consistently report ~5% profit margins. Surely if they were simply stealing, their margins would at least be reaching Google levels?

k__ 8y ago

What does prove even mean in that context?

deleted 8y ago
[deleted]
benologist 8y ago
That the insurance company feels comfortable nobody will punish them for stealing your money. Their business model is who can they get away with not helping really.
- jaggederest 8y ago
  Actually most insurance companies pay out more money in losses than they take in via premiums. The real business models for insurance companies isn't underwriting profits, it's arbitraging the time value of money (pay premiums now, pay claims later) via investing the float.
  - a1369209993 8y ago
    That's not more money though; that's less money exchanged into a weaker (more inflated) currency. Four pounds isn't more than three kilograms just because the number is larger.
  - nradov 8y ago
    That might have been true at some point in history but is no longer possible in a ZIRP environment.
- jaredklewis 8y ago
  This is a very strange point of view. If they are stealing, they aren't doing it very well! Insurance companies tend to only have profit margins around ~5%. And what does that mean about insurance buyers? Are they all idiots for buying insurance, since it just means their money will get stolen? Insurance companies can't afford to pay out any more than they need to; doing so would raise premiums for all customers and make their products less appealing in a fairly competitive industry. Whether NotPetya was an "act of war" (a legal term of art), is a legitimately interesting discussion! To have it reduced to "those insurance companies are stealing" is depressingly simplistic.
  - benologist 8y ago
    That ~5% worked out to almost 4 billion profit last year for my healthcare company. They are incentivized to decline coverage as much as they possibly can and have a long history showing they want to. https://en.wikipedia.org/wiki/Anthem_(company)#Controversies https://en.wikipedia.org/wiki/Anthem_(company)#Controversies The DMHC randomly selected 90 instances where Anthem Blue Cross canceled the insurance of policy holders who had been diagnosed with costly or life-threatening illnesses, to find how many of these cancellations were legal. The agency concluded that all these cancellations were illegal. Falling on "it was an act of war" when no government has declared such a war is nothing more than creative accounting. (this is also Anthem) On 17 March 2010, WellPoint announced it was reclassifying some of its administrative costs as medical care costs in order to meet new loss ratio requirements under the health care law, which requires insurers to spend at least 80% or 85% of customer premiums on health care services, depending on the type of plan.[5 https://www.quora.com/How-many-people-die-in-the-US-each-year-from-denied-medical-insurance-claims https://www.quora.com/How-many-people-die-in-the-US-each-yea... https://www.nytimes.com/2007/03/26/business/26care.html https://www.nytimes.com/2007/03/26/business/26care.html https://www.thedailybeast.com/my-insurance-company-killed-me-despite-obamacare https://www.thedailybeast.com/my-insurance-company-killed-me...
    - jaredklewis 8y ago
      Yes, they are profit making companies. Those profits are distributed to investors, in the case of Anthem, that's mostly institutional investors, i.e. people's retirement funds. What's your point? Anthem's 4% margins are well below the S&P 500 average of 11%. If Anthem was simply stealing surely their margins would be a little higher? And who are the idiots buying Anthem insurance? I mean, if it was just stealing, everyone would take their money somewhere else, no? Of course the truth is not simple, but rather complex. Most any company has a "Controversies" section on their wikipedia page. Toyota once shipped a car with bad brakes. What does it mean? Are all companies simply stealing? Yes, insurance companies are incentivized to decline coverage, so that they can lower premiums (to compete) and increase margins. But they are also incentivized to payout because if they don't, people stop buying insurance. > Falling on "it was an act of war" when no government has declared such a war is nothing more than creative accounting. (this is also Anthem) Quite certain that is not how the courts will interpret the term "act of war." In international law, for example, there is certainly no precedent that a government declaration of war is required for an act to be considered an act of war. Any aggressive act can potentially be considered an act of war. If Russia decided to blow up a bunch of US freighters, sans-declaration of war, fairly certain the act could pass as an act of war.
raincom 8y ago
I think Courts will decide on that matter. The insurance company says some govts claim that these are actions perpetrated by Russia. If courts accept it, they have to decide do these come under the scope of "acts of war". Courts will ask that insurance company to provide more than a newspaper claims. So, they will ask for evidence whether Russia indeed committed these.
jaredklewis 8y ago
In this context, "prove" means convince a judge of the Cook County court that the NotPetya ransomware was not an ordinary cyber attack, but rather a Russian act of war against the US. I think Zurich's point of view is not untenable. If a Russian military submarine had sunk a Mondelez freighter, would it be an act of war? I think possibly. What if a Russian military cyber hacking squad steals their money with ransomware? Less clear, but still certainly a belligerent act on Russia's part. Of course Zurich will need to present a convincing case that the cyber attack was committed by the Russian government. Will be an interesting case.

anigbrowl 8y ago

You're just restating the insurance company's position. The issue is why don't insurance companies want to cover people against war, and the answer is that that's when the people you relied on take the money and run because there's a decent chance that their erstwhile customers will die (physically or financially) and never be able to come after them.

Ntrails 8y ago
They will absolutely cover acts of war. It is simple - just ask them to and hand over the extra money. There is essentially no risk that cannot be insured, but the standard pricing is going to exclude a bunch of tail risks that would be prohibitively expensive to include by default
- jeremyjh 8y ago
  I think there are probably risks that cannot be insured in practice. One of the particulars of war is that it might destroy many insured parties at once, overwhelming any conceivable insurance syndicate. Yes, you could perhaps sell a few policies with limited coverage, but if you cannot credibly calculate the probability of the event occurring it seems hard to imagine there is a price that will make sense to both parties.
  - Ntrails 8y ago
    That's no different to any other catastrophe. Earthquake or tsunamis etc. > it seems hard to imagine there is a price that will make sense to both parties. The price you'd have to pay is likely to be extremely high due to the value at risk and level of uncertainty, and yes insurance companies would also be modelling their exposure and stop selling at some point. A single tanker, for example, could almost certainly find a price at Lloyds.
jaredklewis 8y ago
As have been pointed out by others, insurance companies are more than happy to cover acts of war in exchange for higher premiums. Some insurance policies cover acts of god (extremely rare disasters), some don't. They are priced accordingly. I'm sure it is no different with acts of war or anything else. Insurance companies pretty consistently report ~5% profit margins. Surely if they were simply stealing, their margins would at least be reaching Google levels?