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What is the best way to run an insurance company?

What is the best way to run an insurance company?

  • Charge the highest premiums possible. Pay out the least possible.

    Votes: 9 64.3%

  • Charge the lowest premiums possible. Pay our the most possible.

    Votes: 4 28.6%

  • Do what is best for the world even if it loses you money.

    Votes: 1 7.1%

  • Close it down so that everyone will be screwed.

    Votes: 0 0.0%
  • Total voters
    14
vasuderatorrent

vasuderatorrent

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What is the best way to run an insurance company?

vasuderatorrent
 
I don't think the choices you offer reflect what businesses actually do...
 
vasuderatorrent said:
What is the best way to run an insurance company?

vasuderatorrent
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Depends on the insurance company. There was a time when a significant portion of the stock in the US was owned by insurance companies which used the dividends to offset costs.
 
Fisher said:
Depends on the insurance company. There was a time when a significant portion of the stock in the US was owned by insurance companies which used the dividends to offset costs.
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I guess that company would have picked the second choice.

vasuderatorrent
 
I was an insurance adjuster for about five years (1973-1979). Mostly auto but also some Workmens Comp and Homeowners. I handled about 1500-2000 claims total. Cash settlement was made in probably over 90% of them; total paid on claims was probably over $1 million. The state (NC) Insurance Commissioner was very aggressive in following up on consumer complaints, and also on reining in premium increases.

Seems as though you have suffered some kind of loss, and insurance settlement was either lower than you thought appropriate, or your claim was denied.

Want to give us the details so we can try to judge your case on its merits? You might also consider having the state IC office look into the matter.
 
vasuderatorrent said:
I guess that company would have picked the second choice.

vasuderatorrent
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probably not. I own stock in an insurance company with business related lines. They would be oriented toward paying out as little as possible but hitting the premium points that maximized revenue.
 
Would you agree insurance companies are pretty much ran on numbers and a little bit tradition?
USViking said:
I was an insurance adjuster for about five years (1973-1979). Mostly auto but also some Workmens Comp and Homeowners. I handled about 1500-2000 claims total. Cash settlement was made in probably over 90% of them; total paid on claims was probably over $1 million. The state (NC) Insurance Commissioner was very aggressive in following up on consumer complaints, and also on reining in premium increases.

Seems as though you have suffered some kind of loss, and insurance settlement was either lower than you thought appropriate, or your claim was denied.

Want to give us the details so we can try to judge your case on its merits? You might also consider having the state IC office look into the matter.
Click to expand...
 
mak2 said:
Would you agree insurance companies are pretty much ran on numbers and a little bit tradition?
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I do not know what you mean by that, but it sounds like something that would apply to any established business, and too vague to be useful in analyzing any business.

I worked for an independent claims service. ICs were our clients, not our employers.
 
I worked for a P&C and life and health company many years ago as a sales guy. I really loved it but I BSd too much with my clients and didnt sell enough. Anyway I always enjoyed talking to the actuaries and other number crunchers running the place. OK, they did get really boring after about 5 minutes but it amazed me how close they could come on how many 62 or 45 year old males would die this year (not which ones thankfully) and they kept records and comparative studies of their projetions and risk. They pretty much knew awfully close how much risk they had per each segment of buisness each year. The traditional part seemed pretty anti to the science part above. I was to inform the company if one of my insured if one of my policy holders had a German Shepard Dog. The numbers did not bear out they had any more payout with GSD's (collies were the highest) but the company had, at one time, had a massive payout for a GSD attack. I have always htought insurance companies were very intersting. They know pretty much how much they need to do buisness and profit etc.
USViking said:
I do not know what you mean by that, but it sounds like something that would apply to any established business, and too vague to be useful in analyzing any business.

I worked for an independent claims service. ICs were our clients, not our employers.
Click to expand...
 
mak2 said:
I worked for a P&C and life and health company many years ago as a sales guy. I really loved it but I BSd too much with my clients and didnt sell enough. Anyway I always enjoyed talking to the actuaries and other number crunchers running the place. OK, they did get really boring after about 5 minutes but it amazed me how close they could come on how many 62 or 45 year old males would die this year (not which ones thankfully) and they kept records and comparative studies of their projetions and risk. They pretty much knew awfully close how much risk they had per each segment of buisness each year. The traditional part seemed pretty anti to the science part above. I was to inform the company if one of my insured if one of my policy holders had a German Shepard Dog. The numbers did not bear out they had any more payout with GSD's (collies were the highest) but the company had, at one time, had a massive payout for a GSD attack. I have always htought insurance companies were very intersting. They know pretty much how much they need to do buisness and profit etc.
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I was strictly P&C claims, and had no contact with any underwriters. No client quirks of the sort you mention came to light in any claim I recall handling.

Besides premium income most if not all IC invest heavily. A friend of mine managed the Florida real estate holdings of a major IC in the late 1980s. The value of those holdings was over $500 million just for the state of Florida. IC are also very active in securities.
 
Fisher said:
probably not. I own stock in an insurance company with business related lines. They would be oriented toward paying out as little as possible but hitting the premium points that maximized revenue.
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That is the first choice on the survey.

vasuderatorrent
 
USViking said:
Seems as though you have suffered some kind of loss, and insurance settlement was either lower than you thought appropriate, or your claim was denied.

Want to give us the details so we can try to judge your case on its merits? You might also consider having the state IC office look into the matter.
Click to expand...

Are you serious?

vasuderatorrent
 
USViking said:
Seems as though you have suffered some kind of loss, and insurance settlement was either lower than you thought appropriate, or your claim was denied.

Want to give us the details so we can try to judge your case on its merits? You might also consider having the state IC office look into the matter.
Click to expand...

There is no such event in my life. I supposed I should have specified in my poll. My target product was health insurance.

Some people get all crazy and think that Health Insurance industry should operate under altruistic motives. I have a hard time understanding how you can do that when you have to make a profit in order to exist.

vasuderatorrent
 
vasuderatorrent said:
There is no such event in my life. I supposed I should have specified in my poll. My target product was health insurance.

Some people get all crazy and think that Health Insurance industry should operate under altruistic motives. I have a hard time understanding how you can do that when you have to make a profit in order to exist.

vasuderatorrent
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Drat it, I was hoping I could give you a lecture about how the IC was not obligated to replace that 5-year old car you totaled with a brand new car of the same make and model.

As for the premise you favor by implication I think there is an overriding public need to minimize insurance profits for coverage the public cannot easily do without. That includes health insurance.
 
Our healthcare system could never have been the most expensive in the world without healthinsurance companies.
USViking said:
Drat it, I was hoping I could give you a lecture about how the IC was not obligated to replace that 5-year old car you totaled with a brand new car of the same make and model.

As for the premise you favor by implication I think there is an overriding public need to minimize insurance profits for coverage the public cannot easily do without. That includes health insurance.
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All insurance companies should all pay out all money they have as quickly as possible, file bankruptcy and shut down. Or better yet give money to Obama and politicians and get bailout money.:roll:
 
I could buy that, it would be smarter financailly to pay as you go and cut out the insurance company altogether. But, alas, few can do that.
joko104 said:
All insurance companies should all pay out all money they have as quickly as possible, file bankruptcy and shut down.:roll:
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mak2 said:
Our healthcare system could never have been the most expensive in the world without healthinsurance companies.
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BAM! That is awesome. I thought I was the only one that noticed that. When you pay doctors to save your life, they invest the profits to save more lives.

When you pay an insurance company to (whatever they do) then they invest the profits to hire and train more marketeers and salesman. The benefit that society receives from insurance company is lying commercials, lying campaigns and lying salesman. Health Insurance doesn't have jack squat to do with health care. Insurance is a financial product to protect assets. It's a product to benefit people who have assets. It's ridiculous for people who have very little or no assets. The insurance companies don't spin it that way.

I never purchased health insurance but I would have purchased if my net worth ever warranted it. Wealthy people who need health insurance are sophisticated enough to know the profit motive that exist. The relationship got all jacked up when poor people started buying insurance and making unrealistic demands. The insurance company got greedy and started marketing their product to people that should have never been buying it.

I hate health insurance as a product and as an industry but I didn't ever buy it. It wasn't my concern. This doesn't mean I am a moron and I think health insurance exist to finance everyone's personal tragedy.

vasuderatorrent
 
vasuderatorrent said:
That's the first choice.
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Not it isn't. If my insurance company had raised their premium 5% from what it is the would have a higher possible premium but likely have a lower number of insured. Likewise, the least possible payouts are zero. It is a balancing act to obtain what is deemed the best combination that maximizes profits, not premiums, over a long period of time. Nobody will buy insurance that cost a billion dollars and pays nothing.
 
One of my co-worker crunched number for one of the largest insurance companies in the country. He was actually the personal number cruncher for one of the head honchos. He's told me some of the things that have happened. He's a really nice guy but the stuff he found was used to do some really bad things. Not illegal but immoral by most moral standards.
 
Fisher said:
Not it isn't. If my insurance company had raised their premium 5% from what it is the would have a higher possible premium but likely have a lower number of insured. Likewise, the least possible payouts are zero. It is a balancing act to obtain what is deemed the best combination that maximizes profits, not premiums, over a long period of time. Nobody will buy insurance that cost a billion dollars and pays nothing.
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A billion dollars wouldn't be the highest price possible. If you raise your price from $325 to $326 and lose half of your customers that would mean the highest price possible is $325 not a billion dollars. DUH!
 
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