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Effectively mandatory meaning that insurance without a tracker will be like 10x the price What IF thanks to trackers insurance prices drop by 10x ? So that wit

Effectively mandatory meaning that insurance without a tracker will be like 10x the price What IF thanks to trackers insurance prices drop by 10x ? So that without a tracker the price stays the same as of now. Would it be "effectively" mandatory for you ?

eropple 8y ago
I'm not sure what that question gets you, because this won't be the case. An insurance company would have to drastically shrink, and so would its net profits, to do as you describe. So it quite obviously won't happen. Premiums will remain where they are. The price floor is effectively established. (I do look forward to the next permutation, "well what if somebody lowers prices," so we can have a good round of explaining what a cartel is.)
- CountSessine 8y ago
  I'm not sure what that question gets you, because this won't be the case. But where is their price floor right now compared to their operating margins? If the business is mostly actuarial risk, then dramatically lowering that risk by more accurately characterizing good and bad drivers would see premiums plummet. If the business is mostly SG&A, then better assessing individual risk would be misapplied optimization and wouldn't affect premiums much at all. (I do look forward to the next permutation, "well what if somebody lowers prices," so we can have a good round of explaining what a cartel is.) Do you have good reason to think that car insurers have formed a cartel?
- ip26 8y ago
  If car insurance really is a cartel, then sure, market forces won't work. But in the absence of a cartel, the generally expected outcome would be that safe drivers see lower rates than today and dangerous drivers see higher rates than today. Average premiums would probably remain about the same, because total payouts would remain about the same. I get concerns about privacy & whether the market forces will actually work. But, pricing risk is also the fundamental business of insurance, so it seems very intuitive & logical for them to add additional parameters to quantify risk in their models. The better they can quantify the risk, the more competitive their rates can be, and the more successful they are as a business.
sli 8y ago
> What IF thanks to trackers insurance prices drop by 10x ? Corporations will never, ever be in the business of making less money.
- ttoinou 8y ago
  Making money and lowering prices are not incompatible

eropple 8y ago

I'm not sure what that question gets you, because this won't be the case. An insurance company would have to drastically shrink, and so would its net profits, to do as you describe. So it quite obviously won't happen. Premiums will remain where they are. The price floor is effectively established. (I do look forward to the next permutation, "well what if somebody lowers prices," so we can have a good round of explaining what a cartel is.)

CountSessine 8y ago
I'm not sure what that question gets you, because this won't be the case. But where is their price floor right now compared to their operating margins? If the business is mostly actuarial risk, then dramatically lowering that risk by more accurately characterizing good and bad drivers would see premiums plummet. If the business is mostly SG&A, then better assessing individual risk would be misapplied optimization and wouldn't affect premiums much at all. (I do look forward to the next permutation, "well what if somebody lowers prices," so we can have a good round of explaining what a cartel is.) Do you have good reason to think that car insurers have formed a cartel?
ip26 8y ago
If car insurance really is a cartel, then sure, market forces won't work. But in the absence of a cartel, the generally expected outcome would be that safe drivers see lower rates than today and dangerous drivers see higher rates than today. Average premiums would probably remain about the same, because total payouts would remain about the same. I get concerns about privacy & whether the market forces will actually work. But, pricing risk is also the fundamental business of insurance, so it seems very intuitive & logical for them to add additional parameters to quantify risk in their models. The better they can quantify the risk, the more competitive their rates can be, and the more successful they are as a business.

sli 8y ago

> What IF thanks to trackers insurance prices drop by 10x ? Corporations will never, ever be in the business of making less money.

ttoinou 8y ago
Making money and lowering prices are not incompatible