devnulljp wrote:aens_wife wrote:And with a 1k deductible, most folks don't claim anything!
I think you just figured out their business model.
My Impromptu Essay on Insurance Companies
Preface: I don't believe in evil. I don't believe there is one sinister corporate/religious/fascist/power-hungry/Illuminati-esque group controlling things and deliberately establishing massive institutions and social systems for purely insidious purposes. The world is just far too large and complex for that to happen.
Counter-preface: These sorts of insidious institutions may exist, but only from isolated origin and time rather than deliberate design.
Thesis: There is no devil, but Insurance Companies are about as damn close as you can get. I highlighted dev's statement because that's what it comes down to: their business model. Look at it logically...
A company is driven to make the largest net profit possible
To make a net profit, a company must make a profit.
To make a profit, the company must have a source of income.
To receive income, the company must provide some sort of good/service (what we'll call "product") in return.
To provide a product, the company must make expenditures.
To make a net profit, the profit must be greater than the expenditures
The greater your income is than your expenditures, the larger your net profit
Basic economics, right? (rhetorical question #1, also note: I've never take an economics course in my life) Well what happens when the product is something that the company may choose to or choose not to provide to the already paying customer? The company will opt not to provide whenever possible in order to avoid expenditures.
So to make a couple leaps in logic, the best insurance company will be the one who can attract the most customers, but provide the least product. Also noting: attracting customers is hella expensive (advertising, etc.), so when performed effectively, the more a company invests in attracting customers they will be motivated to provide less service despite increasing income.
A couple more leaps later we reach our conclusion: The insurance company business model, while
undeniably helpful to its customers in many instances, has been established, over time, in a way that strays from providing greater customer service towards simply capturing the greatest market share.
Note: This only is a discussion the business side of insurance companies. The actual realities of risk-averse nature and benefits of having insurance are not being taken into consideration. My editorial note would have to be that I wish we had a better business model for providing a similar service.
I will be expecting my Nobel Prize in the mail, thank you.
