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> for all of that, you earn a 2% to 3% profit margin. Yeah -- it seems like a paradox that the insurance companies charge so many people so much money, yet str
by Taikonerd 11mo ago
> for all of that, you earn a 2% to 3% profit margin.
Yeah -- it seems like a paradox that the insurance companies charge so many people so much money, yet struggle to make a profit.
I've heard that they spend a lot of money handling their "internal friction" -- reviewing claims, handling appeals, etc.
- lotsofpulp 11mo agoHealth insurance premium revenue = medical loss ratio + operating costs + profit margin Medical loss ratio is the money paid to healthcare providers. Operating costs end up being ~10%, across multiple publicly listed companies. This fact, plus 2% to 3% profit margins means any more cost reductions have to come from legislation, reduction in healthcare prices, or advances in automation. https://www.oliverwyman.com/our-expertise/insights/2023/mar/health-insurer-financial-insights-volume-11-p1.html https://www.oliverwyman.com/our-expertise/insights/2023/mar/... https://www.kff.org/private-insurance/medical-loss-ratio-rebates/ https://www.kff.org/private-insurance/medical-loss-ratio-reb...