alt Hacker NewsThe profit margins on insurance are usually pretty slim. Insurance companies are generally not well differentiated from one another, so they have few avenues to compete other than on price. A state-run insurance plan also has to operate at a profit/surplus or else it will have to be subsidized by the taxpayers. The effect is the same either way.
Replies
onlypassingthru • last Friday at 6:55 PM
Slim from a percentage of total premiums but substantial when looking at the absolute dollar amount of profits. It's all relative to the size of the pie.
➕ show 1 reply
Margins being slim doesn't mean much as long as insurance companies see continuing operations as profitable. I'd like to see this model stress tested until more insurance companies pull out. This would cause reductions in the housing market from the increased insurance prices and subsequent mortgage reduction, and would lead to more compartmentalized insurance prices and risk approximations between high and low-risk homes.
Either that or a barrage of government policies which will make things worse for everyone and continue the US economy's descent into the death spiral.