To nit pick, it's not really a bet from the insurers point of view. The idea is that they operate on a scale where they know the total cost they will have to pa

To nit pick, it's not really a bet from the insurers point of view. The idea is that they operate on a scale where they know the total cost they will have to pay out in any given year is less than what they charge in premiums. The key is operating on a big enough scale that they can forecast their costs accurately enough to be able to set their premiums to always make a profit. With that in mind, from a consumer point of view I prefer to look at it as buying peace of mind rather than betting against the insurer (because in the long term the insurer will always win).