4 ms·
you're just renaming things here. the expected real (as opposed to nominal) value is still zero or negative. people don't run insurers out of the kindness of th
by pxx 2y ago
you're just renaming things here. the expected real (as opposed to nominal) value is still zero or negative. people don't run insurers out of the kindness of their hearts.
- SeanLuke 2y agoThey compete with other insurance companies for customers. And the way to do that is to minimize the cost of insurance for a given payout. Which can push the expected value to go positive. If a bank can pay you positive value (in the form of interest), an insurance company can as well.