Originally Posted by BigRedChief
Bull ****ing shit. Now the insurance companies must quit giving lavish million $ bonuses, expensive 5 star trips for team building etc. etc.
Those poor insurance companies must live with a 20% profit margin.
Do you know how I know you have no idea how insurance companies work?
The goal of an insurance company it to break even on on their underwriting losses. Essentially to take in the same amount on premiums that's paid out in claims. How they make their money is investing the money from the premiums they take it and earn money on that before they have to pay it out in claims. They are essentially borrowing money at a 0% clip and if they happen to make a 2-3% profit on the insurance side that's is pretty damn good.
So when insurance companies are forced to pay out more money guess what? They need to take in more money from those already paying the premiums, it doesn't come out of the insurance companies pockets at all because they can't afford to do that without raising addition funds.
So as you see it's just robbing Peter to pay Paul.