7 ms·

I don't really understand how she made money. She apparently still bought tickets. If they weren't delayed she refunded the ticket early. But wouldn't otherwise

by dx034 6y ago

I don't really understand how she made money. She apparently still bought tickets. If they weren't delayed she refunded the ticket early. But wouldn't otherwise the insurance payout just offset the price of the ticket? Or was there a premium on top of that?

xxs 6y ago
Depends on the insurance, delaying a flight might mean a lot - like missing events/meetings/connecting flights, etc.
- usrusr 6y ago
  Connecting flights can be a big use case if you can't get the whole itinerary from a single vendor (or if laws/regulations/terms and conditions fail to make the single vendor responsible for missed connections). But in a perfect world you wouldn't place those bets against an insurance company but against the transport service itself (of the upstream leg). "I see your ticket price of 50 and raise another 20 against your punctuality SLA." This would create incentives and would be so much less of a hassle than alternative approaches that somehow try to factor in actual damages.
Traster 6y ago
It's unclear, but it sounds like there's insurance available in China that will simply pay you money if your flight is delayed by a certain amount of time. The amount you get paid is not tied to the cost of the ticket it's simply a feature of the contract, so obviously there's a trade-off there with a profitability = Insurance Payout * Probability of Delay - Flight Cost
- gambiting 6y ago
  I mean, I'm sure such policy could be arranged elsewhere too as a custom thing, but it's basically gambling at that point. You might as well go to a bookie and place a bet that a flight will or will not be delayed(most bookies would be happy to accept such bet too).
  - silvester23 6y ago
    I think the difference is mostly that a bookie might give you different odds for different flights. I assume the insurance costs the same, regardless of the current likelihood that a specific flight is going to be delayed.
  - Nextgrid 6y ago
    Is this some sort of joke I'm not getting or are there actual bookies that take bets on real-world events, and if so how do they determine the odds (in sports from what I understand the odds are determined by the amount gambled on either side, but I can't imagine there is a big enough market for bets on flight delays to make that work)?
    - caf 6y ago
      Well there's examples like this: https://www.sportsbet.com.au/betting/novelty-bets/-realdonaldtrump-futures/trump-v-twitter-5224696 https://www.sportsbet.com.au/betting/novelty-bets/-realdonal...
    - rswail 6y ago
      > in sports from what I understand the odds are determined by the amount gambled on either side This is incorrect. This is what applies in a totalizator market like some racing betting agencies. They take the pool of money (eg for a win) and deduct a fixed fee before paying out to the winning bet. The "odds" there are determined by which competitor the market thinks is most likely to win. But bookmakers actually provide odds based on their own assessments. They are taking the "other side" of the bet and can suffer losses. And yes, there are bookmakers that will take bets on almost anything. They do it the same as any risk takers, by researching the probabilities. People bet on political outcomes, sports outcomes, all sorts of different real world events.
      - webmaven 6y ago
        > And yes, there are bookmakers that will take bets on almost anything. They do it the same as any risk takers, by researching the probabilities. Aren't there insurance companies (eg. Lloyd's) that will do the same?
wickoff 6y ago
She received payments from multiple insurance companies for the same flight.
Puts 6y ago
If she had 30-40 insurance policies as it says in the article, maybe she was able to get each ticket refunded 30-40 times? And then did this with each of her 20 identities.
phonon 6y ago
She received about $500 per delayed flight as delay compensation. It's supposed to cover extra travel/hotel/inconvenience arising from a significantly delayed flight. Since the amount involved is fairly small, payout is pretty automated...they're not checking if you actually incurred the additional expense, or even if you showed up for the flight...
gwbas1c 6y ago
> I don't really understand how she made money. Well, she had some kind of inside knowledge where she knew that insurance would probably provide a payout for the flight. I'd like to know what this inside knowledge is? What did she know that she could use to predict that a flight would probably be delayed?
- throwawaygh 6y ago
  > What did she know that she could use to predict that a flight would probably be delayed? At least in the USA, information on previous flights (on time / delayed / canceled) is public. Routes are pretty fixed. Combined with weather forecasts, that is probably enough information to turn a profit. I guess from the article she had "insider information", but I'm not sure why that would be necessary to use this scheme?

by dx034 6y ago

xxs 6y ago

Depends on the insurance, delaying a flight might mean a lot - like missing events/meetings/connecting flights, etc.

usrusr 6y ago
Connecting flights can be a big use case if you can't get the whole itinerary from a single vendor (or if laws/regulations/terms and conditions fail to make the single vendor responsible for missed connections). But in a perfect world you wouldn't place those bets against an insurance company but against the transport service itself (of the upstream leg). "I see your ticket price of 50 and raise another 20 against your punctuality SLA." This would create incentives and would be so much less of a hassle than alternative approaches that somehow try to factor in actual damages.

Traster 6y ago

It's unclear, but it sounds like there's insurance available in China that will simply pay you money if your flight is delayed by a certain amount of time. The amount you get paid is not tied to the cost of the ticket it's simply a feature of the contract, so obviously there's a trade-off there with a profitability = Insurance Payout * Probability of Delay - Flight Cost

gambiting 6y ago
I mean, I'm sure such policy could be arranged elsewhere too as a custom thing, but it's basically gambling at that point. You might as well go to a bookie and place a bet that a flight will or will not be delayed(most bookies would be happy to accept such bet too).
- silvester23 6y ago
  I think the difference is mostly that a bookie might give you different odds for different flights. I assume the insurance costs the same, regardless of the current likelihood that a specific flight is going to be delayed.
- Nextgrid 6y ago
  Is this some sort of joke I'm not getting or are there actual bookies that take bets on real-world events, and if so how do they determine the odds (in sports from what I understand the odds are determined by the amount gambled on either side, but I can't imagine there is a big enough market for bets on flight delays to make that work)?
  - caf 6y ago
    Well there's examples like this: https://www.sportsbet.com.au/betting/novelty-bets/-realdonaldtrump-futures/trump-v-twitter-5224696 https://www.sportsbet.com.au/betting/novelty-bets/-realdonal...
  - rswail 6y ago
    > in sports from what I understand the odds are determined by the amount gambled on either side This is incorrect. This is what applies in a totalizator market like some racing betting agencies. They take the pool of money (eg for a win) and deduct a fixed fee before paying out to the winning bet. The "odds" there are determined by which competitor the market thinks is most likely to win. But bookmakers actually provide odds based on their own assessments. They are taking the "other side" of the bet and can suffer losses. And yes, there are bookmakers that will take bets on almost anything. They do it the same as any risk takers, by researching the probabilities. People bet on political outcomes, sports outcomes, all sorts of different real world events.
    - webmaven 6y ago
      > And yes, there are bookmakers that will take bets on almost anything. They do it the same as any risk takers, by researching the probabilities. Aren't there insurance companies (eg. Lloyd's) that will do the same?

wickoff 6y ago

She received payments from multiple insurance companies for the same flight.

Puts 6y ago

If she had 30-40 insurance policies as it says in the article, maybe she was able to get each ticket refunded 30-40 times? And then did this with each of her 20 identities.

phonon 6y ago

She received about $500 per delayed flight as delay compensation. It's supposed to cover extra travel/hotel/inconvenience arising from a significantly delayed flight. Since the amount involved is fairly small, payout is pretty automated...they're not checking if you actually incurred the additional expense, or even if you showed up for the flight...

gwbas1c 6y ago

> I don't really understand how she made money. Well, she had some kind of inside knowledge where she knew that insurance would probably provide a payout for the flight. I'd like to know what this inside knowledge is? What did she know that she could use to predict that a flight would probably be delayed?

throwawaygh 6y ago
> What did she know that she could use to predict that a flight would probably be delayed? At least in the USA, information on previous flights (on time / delayed / canceled) is public. Routes are pretty fixed. Combined with weather forecasts, that is probably enough information to turn a profit. I guess from the article she had "insider information", but I'm not sure why that would be necessary to use this scheme?