Which is a lie, they’re making billions in profit every year while committing this fraud, including the big ones like State Farm (which also has a history of racism, shocker).
And there’s legislation saying that the American peasants are mandated to have insurance just for them to be able to turn around and refuse having to pay out. Insurance is huge government backed scam.
Profits are paid out in the form of dividends. They aren’t just sitting on a pile of cash. That is the problem. Instead of having money they are giving it to the wealthy instead of paying out policies.
I was quite surprised when I first learned it, there are insurance companies which specialize in selling insurance to insurance companies in case the insurances they sold have to be paid. See Reinsurance on Wikipedia for example.
Obviously Reinsurance companies might reinsure their claims to other Reinsurance companies until nobody knows who is actually paying.
Similar to packing rotting investments with other investments and selling them to retirement founds, because hey look, there are good investments in it.
Reinsurers don’t really take out their own insurance further, at least I haven’t heard of that happening. I do work for one of those Reinsurers
My finance teacher said that reinsurance often used financial derivatives to offset risk… is that true? Just made me have a wild flashback to like a couple decades ago.
Maybe I remember it wrong, been a while since I had contact with the insurance industry.
Also might depend on national insurance regulations.
I assume you’re right since you are in the sector, but I don’t know where I picked up the notion, that reinsurers would reinsure themselves.
To be fair it could happen in some circumstances but I don’t think it’s normal, there is just no business case, reinsuring works by the insurance company paying a part of the premiums to the reinsurer to insure X amount from the portfolio, reinsurer would have to do the same, you run out of money quite soon.
I don’t know that much though, I am new to the company and I am in IT, so it’s not my domain to know exactly how it works.
Cali also requires a significant cash reserve for disasters like this.
Pretty much the plot of The Laundromat (2019), the Netflix Panama Papers movie. It’s pretty good.
Insurance CEO: We don’t see a necessity for a replacement house.
yo premiums be going up yo 💹
ps direct your anger at fossil fuel lobby and their politicians please. they knowingly cause this shit.
Like the old W.C. Fields line, “Sorry, I can’t give you money. All my money is tied up in currency.”
I think they have force majeure clauses in almost everything.
Insurance: exists for the case something bad happens.
Insurance companies: “Something bad happened, we can’t do anything!”
