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Comment by paulusthe | Hacker News Reader

If we had data on the median insurance cost per person - I know I pay a lot more than $1035/year - we could hypothetically have a rough estimate of how much the uninsured cost everyone else.

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I'd be more interested for insurance of total paid in - total paid out. I bet a few companies make out like bandits.

What? Insurance companies are famous for their generous payouts and not at all using scummy tactics and wording to void claims! /s

They seem to have pretty low profit margins.

that's not necessarily a good guide. Let's say you make a lot of money. You can pay your executives millions, have lush offices with swimming pools and tennis courts, company jets etc and report razor thin "profits". Not that they're doing that - but you can creative accounting your way out of reporting profits.

For instance, the star wars movies, forrest gump, lord of the rings, men in black and harry potter are all still not technically "in profit": https://en.wikipedia.org/wiki/Hollywood_accounting

That's why money in - money out is a better barometer for insurance and people with star power negotiate different terms these days like percentage of "dollars in". I made a video a couple years ago with a writer friend who is now on strike about this.

(I'm cutting out the first 5 minutes of chit-chat and it's processing on youtube, but if you see this after that happens, just go to the beginning) https://youtu.be/QZBqjZS3hZA?t=296

Profit margin is money in minus money out.

Movie studios and their individual accounting for individual movies are not comparable to accounting for an entire audited and publicly listed business subject to regulations, since those are explicitly not accurate portrayals of an entire businesses ins and outs.

There is no reason a business’s owners, and in a publicly listed company’s case, shareholders, are okay with executives paying themselves lavishly just to report smaller profit margins and leave the business owners with less.

I certainly would not be.

And in most cases where they are profitable, it's a result of the float that they can invest in the time frame between when they collect premiums and pay out claims. Some insurance companies actually collect less than they pay out, and make up the difference on the interest from float.

I think it's actually incredible and very unappreciated that society can insure against so much risk for the price of nothing more than the time value of money.

Plus, the insurance company takes the risk of interest rate movement. If you were to self insure, you'd be exposed to that risk. In the last year as interest rates have climbed, this effect has been very visible. Allstate for random example is in the red by several billion over the last few quarters because bond prices have imploded. But their customers are insulated from that risk.

Exactly. I also find it funny about tech workers on a tech forum who work for businesses that earn 20%+ profit margins even at $100M+ revenue, something almost all other business other than pharma and oil can only dream of, falsely pointing fingers at price gouging.

I didn't accuse insurance companies of price gauging. I take issue with the difficulty of getting money back out of an insurer. Some types of insurance make it incredibly difficult to get them to actually pay claims. In fact many insurance companies deny claims by default banking on the fast many people will give up on the claim.

Insurance is not inherently evil or bad but insurance companies tend to be very scummy in their actual behavior towards their customers.

Looks like around 60% payout when discussing premium/payouts alone. Operating expenses eats into almost all the rest. Then they make money investing the float.

https://www.alphaquery.com/stock/AFL/fundamentals/annual/com...

Don't forget the ambulance chasers get 30% of insurance payouts

I think there are so many other factors though. Regulations about what must be covered, competitiveness in insurance markets, expected payouts for various situations, and a big thing: Americans are much richer and drive more expensive cars than in basically any other reasonably sized developed country, so you should expect the insured value to be higher.

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