3 ms·

Why does doing it upfront require so many people, and doing it afterwards doesn't? You could just have a standard formula for upfront insurance?

arcticbull 6y ago
Who's going to figure out how much to charge? :)
- timeeater 6y ago
  The standard formula?
  - arcticbull 6y ago
    Got a link? ;) Actuaries hate him!
    - timeeater 6y ago
      Well the industry would have to make a one-time investment to determine the formula.
croon 6y ago
Upfront you don't know how much, if anything, will be lost.
- timeeater 6y ago
  But everybody knows the value of their goods?
  - croon 6y ago
    Do you have a point? Because it sounds like you're suggesting regular insurance, which answers your original question.
    - timeeater 6y ago
      But to take regular insurance, you don't need all those complicated things. I have for example a travel health insurance that only requires me to send a fixed amount of money to their bank account, instant insurance. Yeah my point is/was that you can just use regular insurance. That's my point. Or at least I don't see why not. Presumably the shipping industry has a reason.
      - croon 6y ago
        > But to take regular insurance, you don't need all those complicated things. I have for example a travel health insurance that only requires me to send a fixed amount of money to their bank account, instant insurance. Long story short: your travel insurance has all those complicated things, and you pay for it. And you also pay for the convenience of not seeing that complexity. The cost of explicitly covering only costs incurred on accidents, like in the shipping industry OP case, would give you a much much lower cost on your travel insurance (technically no longer an insurance). But then you would have to pay irregular amounts on irregular occasions. You also pay a premium to get a fixed budgetable amount.
        timeeater 6y ago
        Why does it have to be a premium for getting a fixed budgetable amount? If they ship millions of containers, surely they can work out an efficient solution. Yes, at some point they need a lawyer and what not. But not every single time somebody wants to ship a container. They work it out once and that's it. Even if the lawyer costs 100 million dollars, if they ship millions of containers every year, they can scale the cost down to one dollar per container in the end. The system to only ask for money in case of accidents doesn't actually make it cheaper or less complicated. There simply is the inherent "cost" (a ka expected loss) of accidents, that you have to pay one way or another. There may also be people who don't want to pay, and then you still need your lawyer. My travel insurance is very cheap, by the way. Insurance is an old and established business, many learnings already exists. The industry presumably is quite good at estimating and pricing risks.

arcticbull 6y ago

Who's going to figure out how much to charge? :)

timeeater 6y ago
The standard formula?
- arcticbull 6y ago
  Got a link? ;) Actuaries hate him!
  - timeeater 6y ago
    Well the industry would have to make a one-time investment to determine the formula.

croon 6y ago

Upfront you don't know how much, if anything, will be lost.

timeeater 6y ago
But everybody knows the value of their goods?
- croon 6y ago
  Do you have a point? Because it sounds like you're suggesting regular insurance, which answers your original question.
  - timeeater 6y ago
    But to take regular insurance, you don't need all those complicated things. I have for example a travel health insurance that only requires me to send a fixed amount of money to their bank account, instant insurance. Yeah my point is/was that you can just use regular insurance. That's my point. Or at least I don't see why not. Presumably the shipping industry has a reason.
    - croon 6y ago
      > But to take regular insurance, you don't need all those complicated things. I have for example a travel health insurance that only requires me to send a fixed amount of money to their bank account, instant insurance. Long story short: your travel insurance has all those complicated things, and you pay for it. And you also pay for the convenience of not seeing that complexity. The cost of explicitly covering only costs incurred on accidents, like in the shipping industry OP case, would give you a much much lower cost on your travel insurance (technically no longer an insurance). But then you would have to pay irregular amounts on irregular occasions. You also pay a premium to get a fixed budgetable amount.
      - timeeater 6y ago
        Why does it have to be a premium for getting a fixed budgetable amount? If they ship millions of containers, surely they can work out an efficient solution. Yes, at some point they need a lawyer and what not. But not every single time somebody wants to ship a container. They work it out once and that's it. Even if the lawyer costs 100 million dollars, if they ship millions of containers every year, they can scale the cost down to one dollar per container in the end. The system to only ask for money in case of accidents doesn't actually make it cheaper or less complicated. There simply is the inherent "cost" (a ka expected loss) of accidents, that you have to pay one way or another. There may also be people who don't want to pay, and then you still need your lawyer. My travel insurance is very cheap, by the way. Insurance is an old and established business, many learnings already exists. The industry presumably is quite good at estimating and pricing risks.