There's also the correlated risk issue. Say 10% of your claims are against some natural disaster, and they will either not get triggered at all, or all get tri

There's also the correlated risk issue. Say 10% of your claims are against some natural disaster, and they will either not get triggered at all, or all get triggered at the same time. That's an uncomfortable situation - this is what is called catastrophe risk. Ideally as an insurer you want lots of uncorrelated risks and the strong law of large numbers is on your side. Insurers typically outsource such catastrophy risks (to some extent anyway) to reinsurers, ie insurers to insurers, but (a) that's not a hard guarantee of risk mitigation and (b) they still have to pay for it. I can imagine that in this whole quagmire, and considering what people would pay for insurance, it's easier to just pass.