Re:Peer-to-Peer Insurance
by plonh on Thursday October 01, 2015 @11:58PM
(#10316663)
You raise a good point: why is it even legal for premiums to become profit? Insurance should have two separate pots: the money that is contributed to cover claims, and the fee that the manager charges. Allowing "non-payment of claims" to become profit is a huge moral hazard.
[ Parent
| on HN ]
> Allowing "non-payment of claims" to become profit is a huge moral hazard
Totally, it's EPIC, EPIC, EPIC, moral hazard. The hazardiest of hazards. It's toxic; all of the mistrust and information asymmetry flows out it.
If insurers weren't constantly nudging prices there'd be no need to switch car insurer so often (45% of the UK motor market churns per year) and the price comparison sites probably wouldn't need to have existed.
If people could trust insurers to handle claims fairly then we wouldn't need to spend as much money managing complaints and government oversight.