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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 underwrit
by 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 agoThat'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 agoThat might have been true at some point in history but is no longer possible in a ZIRP environment.