4 ms·

Well, that line mostly boils down to whether the expected value of the bet is positive, and the insurer in the article seems to do pretty sound analysis to ensu

Well, that line mostly boils down to whether the expected value of the bet is positive, and the insurer in the article seems to do pretty sound analysis to ensure his expected return is positive. I don't see where it gets close to gambling.

jimkleiber 4y ago
Well, I'd say if the insurer is the house, then the insuree might be the gambler.
- Dylan16807 4y ago
  The insuree feels like a gambler to the insurer/house, but they never get the money. Their goal is the exact opposite of gambling, to pay a fixed fee to remove variance.
rileymat2 4y ago
I am not sure insurance v. gambling has anything to do with expected value. Typically, I see the distinction as protecting something you already have compared to getting something new.
gregplaysguitar 4y ago
Neither have a positive return as far as the gambler/insuree is concerned, if they do, they casino/insurer will not stay in business for long! The difference is that one has a potential huge upside, the other prevents a potential huge downside
- genewitch 4y ago
  One should keep in mind that the literal "best odds", as far as i know, at any casino are on "Don't" bets on craps, after the shooter lands a number and the button says "ON". With odds on your Don't bet, you can take the house edge down to 0.13%, or 13 cents for every $100 you bet. If you don't feel like "laying odds" you can place "Come" bets with odds behind them for 0.16%. I rarely play don't, but when i do, i'm the shooter!
sampo 4y ago
> the insurer in the article seems to do pretty sound analysis to ensure his expected return is positive Just like casinos ensure their expected return is positive. So?
deleted 4y ago
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danielmarkbruce 4y ago
Most people don't have that as the distinction. The distinction has tended to be defined around "are you creating new risk?" If yes = gambling. If no = insurance (or hedging).

jimkleiber 4y ago

Well, I'd say if the insurer is the house, then the insuree might be the gambler.

Dylan16807 4y ago
The insuree feels like a gambler to the insurer/house, but they never get the money. Their goal is the exact opposite of gambling, to pay a fixed fee to remove variance.

rileymat2 4y ago

I am not sure insurance v. gambling has anything to do with expected value. Typically, I see the distinction as protecting something you already have compared to getting something new.

gregplaysguitar 4y ago

Neither have a positive return as far as the gambler/insuree is concerned, if they do, they casino/insurer will not stay in business for long! The difference is that one has a potential huge upside, the other prevents a potential huge downside

genewitch 4y ago
One should keep in mind that the literal "best odds", as far as i know, at any casino are on "Don't" bets on craps, after the shooter lands a number and the button says "ON". With odds on your Don't bet, you can take the house edge down to 0.13%, or 13 cents for every $100 you bet. If you don't feel like "laying odds" you can place "Come" bets with odds behind them for 0.16%. I rarely play don't, but when i do, i'm the shooter!

sampo 4y ago

> the insurer in the article seems to do pretty sound analysis to ensure his expected return is positive Just like casinos ensure their expected return is positive. So?

deleted 4y ago

[deleted]

danielmarkbruce 4y ago

Most people don't have that as the distinction. The distinction has tended to be defined around "are you creating new risk?" If yes = gambling. If no = insurance (or hedging).