Well informed legalized gambling against certain outcomes backed up by contracts with a large sum of people. The goal is to win more bets than it loses. To cove

Well informed legalized gambling against certain outcomes backed up by contracts with a large sum of people. The goal is to win more bets than it loses. To cover the losses for the times that it does lose the company pools the money you and others pay every month together. Whatever is left in the pool after all the contracts end is how much money the insurance company made. If they have to pay out more than is in the pool, then they lose money. Rinse and repeat.