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Are you using “self-insured” as a euphemism for “just eats the losses”? Because it’s not really insurance if there’s no risk pooling, and a large retailer is a
by jkhdigital 5y ago
Are you using “self-insured” as a euphemism for “just eats the losses”? Because it’s not really insurance if there’s no risk pooling, and a large retailer is a single entity—who are they pooling risk from? Individual stores? That would make sense only if they are franchises.
- mbg721 5y agoThey may not be pooling risk, but they may be hiring actuaries to look at their past losses compared to similar businesses, and setting aside a reserve to cover expected future risk.
- jkhdigital 5y agoI’m sure that’s exactly what they do, but that’s not insurance—just prudent risk management.
- refurb 5y agoThat’s basically what self-insured is. Large employers offer health insurance but they aren’t pooling risk with other companies, they just pay all expenses. Insurance is meant to protect against catastrophic loss. If a loss isn’t catastrophic, it’s often cheaper to just pay for the loss yourself.
- ericbarrett 5y agoIt is a well-defined term: https://www.investopedia.com/terms/s/self-insure.asp https://www.investopedia.com/terms/s/self-insure.asp