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A comment on Is the World Becoming Uninsurable?. Parent comment
Of course insurance is about pooling risk. But subsidizing implies you’re doing it below market rates.
If I pay my market rate but still -EV insurance premium, I’m not subsidizing anyone. I’m just happy to pay for the convexity insurance provided.
If I have to pay 20% more than I otherwise would, because the insurance company can’t charge someone else 20% more, that is actual subsidization.
A subsidy distorts natural market forces. This is what I am talking about.
Don’t be so quick to be a dick.
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Of course insurance is about pooling risk. But subsidizing implies you’re doing it below market rates.
If I pay my market rate but still -EV insurance premium, I’m not subsidizing anyone. I’m just happy to pay for the convexity insurance provided.
If I have to pay 20% more than I otherwise would, because the insurance company can’t charge someone else 20% more, that is actual subsidization.
A subsidy distorts natural market forces. This is what I am talking about.
Don’t be so quick to be a dick.