'Troll insurance' to cover the cost of internet bullying
telegraph.co.uk
telegraph.co.uk
I think a "internet shaming/harrasment recovery program" would be a better solution.
But, considering it's the internet, I'd really like to know what Chubb will consider "trolling" and how much of it will make the holder able to claim the money.
My very first thought is - why wouldn't the policy holder make some anon accounts and "bully" themselves, lose their "job" (twitch or youtube broadcaster for example) and claim the money.
maybe nothing, I'm not overly familiar with the various types of insurance fraud schemes, but it does seem like masquerading as internet bullies via vpn and feigning a ruined life would be easier than faking your death, for example.
The business model for conventional insurers is to take cash from the investment markets and hold it against their customers risk, gambling that their customers will on aggregate pay more than they claimed. There's presently more demand for this type of investment return than there is supply, so insurers are all scrabbling to find new types of product then try to drum up demand.
Assuming that's the force in play here expect to see a bit of PR trying to scare people as to the dangers of online abuse
My business holds an E&O policy from USLI, a Berkshire Hathaway subsidiary. We pay them $2k a year for the privilege. I think from reading their annual reports that they earn a slight underwriting profit and make an absolute killing on holding hundreds of thousands of dollars from other firms for years before paying it out to the one unlucky winner of the lawsuit lotto.
A combined ratio of 100 means you've paid out $1.00 in claims and expenses for every $1.00 brought in as premium. Sounds bad but due to investments made an insurance company can still be profitable with a combined ratio of 100 or over.
This is what they'll tell you, but most insurance companies make net revenue even before investment gains and assuming a combined ratio of 100, because they don't include the sale of ancilliaries in the combined ratio. If they sell you car insurance, the basic premium is used to calculate the combined ratio, any alloy wheel cover, no claims protection, lost key cover, etc are kept out to make it seem like life as an insurance company is harder than it really is.
Your description of how insurance makes money is the standard understanding. However, I would think that most products do have some underwriting gain built in as well.
It can get pretty complex as you need to set up a liability (reserve) to match the assets (premium) that come in. Interest causes both the asset and liability to increase. As benefits are paid out, both the asset and liability decrease. If the liability decreases more than the asset, you make money. Or if you have a substantial surplus (asset - liability), the interest on that is pure profit as well.