The point you missed is that when insurance is hyper tailored to specific people, you are basically paying for your own healthcare and can cut out the middle man

That is assuming all health related costs can be predicted 100% correctly. If there is a 1/3rd chance to incur a cost then insurance lets you get away with only paying 1/3rd of the cost.

Yes, the is the assumption in this hypothetical.

In that hypothetical in the best case the insurance company will never lose money by charging someone less than what they will have paid out to them and they will be able to sell this service to other companies, in the worst case they become essentially a bank.

Uh, no. Insurance is paying for unlikely events, as it was said above. Greener area or not, you can still get run over by a car, event for which you definitely didn't pay. Or you house struck by lightning, or any such insurance cases might arise. The green area only affects the probability of such events, thus the tailoring.

But my point is by hyper-optimising for individuals it will at some point cross a line where it's not really insurance as you understand it any more. The unlikely event is that the insurance company gets it wrong, for example your house floods in an area that was not predicted to flood for millennia. As the insurance company gets better, the chance of an unlikely event gets smaller. How small can that chance get before you decide to just take the risk yourself?

insurance <> healthcare

the point of insurance is to cover for unlikely events not expected events (like you needing increase healthcare support as you age)

You don't think that insurance companies will charge a hefty premium for sitting in the middle of that? That's a pretty classic middle man scenario.