3 ms·
Reduction in premiums doesn’t mean reduction in profit.
by ezfe 10mo ago
Reduction in premiums doesn’t mean reduction in profit.
- surajrmal 10mo agoAren't insurance profits capped to some percentage of revenue in most jurisdictions by law?
- ezfe 10mo agoYes, this is true - but it’s still beneficial enough to have fewer claims. Claims incur cost in many ways and running a business with fewer claims would be more predictable and likely worth the minimal trade off.
- sib 10mo agoIt generally does. If accidents (and payouts) drop by 90%, revenue will ultimately drop and profits will follow. Profit margins may increase, but total profit $$ will likely drop.