Insurance Agencies are almost to a one, a scam.
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The concept of pooled risk is sound. It's basically the reverse of gambling- somebody is going to be a big loser, so we all pay a little to mitigate that risk. The problem really stems from how insurance is run.
As soon as you pay your premium, the money belongs to the company, and any claims they pay out is just money out of their bottom line. It would work correctly if they only got to keep an administrative fee and the bulk of your money had to be deposited in a fund for the purpose of paying claims.
The company is still incentivized to not pay spurious claims, because it would deplete the fund, but denying all claims and allowing the fund to grow to billions of dollars wouldn't benefit them, because it's not money they get to keep.
If they were required to publicly post their premiums and information on how often and how much they pay, the competition would be to attract the most customers by walking that fine line of paying every claim you could, because the only way to increase profits would be to increase your customer base.
The concept of pools risk is fundamentally unsound. The insurance company has costs.
For example. Lets say we have 100 customers and an event that occurs at a rate of 1 in 10 per year. That event cost 100 dollars. Thus the total cost per year for the 100 people is 1000 dollars.
Now lets add an insurance company to the mix. They have to extract 1000 dollars per year to cover the payouts from the 100 people, so 10 dollars per person, so far. In addition they have to extract enough to pay their employees. Lets assume they have 1 employee working 1 hour a week at minimum wage. That is an additional $750 a year the insurance company has to extract. Thus the total yearly cost for this insurance is $17.50, and the total yearly profit for the insurance company is $0. Insurance, like banking is a scam, adding cost to things that should have no cost.
The ideal insurance is self insured.
The figure you're complaining about is called "Expense Ratio".
For life insurance, the industry average expense ratio is about 10.5%. For property casualty, it's about 27%.
Health Insurance uses a reversed figure called Medical Cost Ratio, which is legally required to be at least 80%-85% (depending on some criteria). This is because unlike Life and P&C, health insurance is basically always a money losing venture.