AI
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| Posts | 16175 |
| Boards Moderated | 33 |
| Alias Born | 09/30/2000 |
Wednesday, October 23, 2002 1:02:03 PM
Matt,
Having the same disdain for Car Insurance as you do...
I offer the following to "the debate"!
I just got back from a Business Convention in Las Vegas, Nevada.
As we all know, Las Vegas is the "Land of Casino Hotels!"
In my mind, and secretively unbeknowst to the public, the Casinos of the "world" operate in much the same fashion as insurance companies do, in that they offer to the public a chance to "BET" upon how well we are able to be financially responsible for ourselves.
In gambling terms, I am sure you have heard the phrase...
The HOUSE always WINS!....
The same is true in the Insurance Industry.
All "participants" make individual decisions about how MUCH to invest.
There are "house rules" as to the bare minimum the gambler is allowed to invest.
Not to confuse the issue, but although it appears that the Insurance Industry MIMICS the Gambling Industry, it isn't quite that simple.
In gambling, you have a "CHANCE" as an "investor" to actually PROFIT from your "investment". In insurance, you do not have that LUXURY!
OK...you are probably now saying, "What the HELL is he talking about?"
When "INSURANCE COMPANIES" first became 'largely popular', those who 'participated' were actually 'members' of a collective group of participants who "agreed" to abide in a policy of terms whereby all "members" would pony up money into a ...shall we say.... "RISK POOL".
As an example, 100 members 'pony up' $1000 into the risk pool....
The available 'funds' against an accident, or death, or rehabilitation are then $100,000. (Don't lose sight of how I will attempt to relate this to the GAMBLING INDUSTRY!)
The 100 'members' have all agreed that if the RISK is LESS than the CONTRIBUTIONS to the PLAN, the remainder will be divided amongst all the 'participants' at the end of the year, and thus will expect new individual contributions the following year into the prior agreed "RISK POOL".
Insurance Companies STARTED out THAT WAY, yet today are more like the "Gamers" at the Casinos. No WAY will the Casinos decide the remaining "PROFITS" amongst the 'participants'. Like Casinos, today's insurance companies keep the "EXTRA PROFITS" in order to PROTECT the "insured"/(gamblers) against 'future losses'.
I know this sounds simplistic in explanation, but I am sure you understand the "jist".
MOST "INSURANCE" of any kind today is based upon this simplistic strategy that the "house" must MAINTAIN any and all EXCESS of contributions into the program by all participants as a HEDGE AGAINST LOSSES the following year.
Now here is where it gets UGLY. In legalized gambling, participants are not FORCED to 'bet' more each time they bet. However, in the Insurance Industry, the participants are demanded and expected to "pony up more money FOR THE BET!"
This is why you see the ridiculous fees that Insurance Companies Charge.
It is a clear conundrum of ridiculousness.
Or is it?
Are you still saying "HUH?"
Look at it this way...
If you and I were at a CRAPS table in Vegas...would you be a better Dice Shooter than I? Of course not. The dice KNOW NOT who "threw them"!
This is the crux of where the Insurance Industry has taken the 'gambling industry' to the 'next step beyond'.
"How", you ask?
Well, they analyze STATISTICS. By gosh, so do the gambling casinos!
The most fascinating thing I viewed this weekend in Vegas were the NUMBER OF "Hidden Smoked Globe Cameras" in the Ceiling, ever present, watching like a HAWK.
The Insurance Industry uses these same "cameras" in the form of "STATISTICS".
I think I have digressed here, but I think that you see my point. And the point is...
THE INSURANCE INDUSTRY IS SELLING "A DREAM". JUST LIKE THE GAMBLING INDUSTRY SELLS. The "dream" that both of these industries sell is "peace of mind".
In Vegas and Atlantic City, gamblers are lead to believe that they have the potential to be adequately able to "break even on their investment" and perhaps to even get a
PROFIT!
In the Insurance Industry, participants are lead to believe that they have the potential to be adequately able to "PROFIT on their investment" or at LEAST "break even".
Do you SEE the similarites in the differences?
Gambling makes you a "CONFIDENT LOSER"
Insurance makes you a "RELUCTANT WINNER"
This was fun to analyze and chat about, I hope it makes it all clear to you now.
4 to 1 ODDS says it DOESN'T! LOL!
Having the same disdain for Car Insurance as you do...
I offer the following to "the debate"!
I just got back from a Business Convention in Las Vegas, Nevada.
As we all know, Las Vegas is the "Land of Casino Hotels!"
In my mind, and secretively unbeknowst to the public, the Casinos of the "world" operate in much the same fashion as insurance companies do, in that they offer to the public a chance to "BET" upon how well we are able to be financially responsible for ourselves.
In gambling terms, I am sure you have heard the phrase...
The HOUSE always WINS!....
The same is true in the Insurance Industry.
All "participants" make individual decisions about how MUCH to invest.
There are "house rules" as to the bare minimum the gambler is allowed to invest.
Not to confuse the issue, but although it appears that the Insurance Industry MIMICS the Gambling Industry, it isn't quite that simple.
In gambling, you have a "CHANCE" as an "investor" to actually PROFIT from your "investment". In insurance, you do not have that LUXURY!
OK...you are probably now saying, "What the HELL is he talking about?"
When "INSURANCE COMPANIES" first became 'largely popular', those who 'participated' were actually 'members' of a collective group of participants who "agreed" to abide in a policy of terms whereby all "members" would pony up money into a ...shall we say.... "RISK POOL".
As an example, 100 members 'pony up' $1000 into the risk pool....
The available 'funds' against an accident, or death, or rehabilitation are then $100,000. (Don't lose sight of how I will attempt to relate this to the GAMBLING INDUSTRY!)
The 100 'members' have all agreed that if the RISK is LESS than the CONTRIBUTIONS to the PLAN, the remainder will be divided amongst all the 'participants' at the end of the year, and thus will expect new individual contributions the following year into the prior agreed "RISK POOL".
Insurance Companies STARTED out THAT WAY, yet today are more like the "Gamers" at the Casinos. No WAY will the Casinos decide the remaining "PROFITS" amongst the 'participants'. Like Casinos, today's insurance companies keep the "EXTRA PROFITS" in order to PROTECT the "insured"/(gamblers) against 'future losses'.
I know this sounds simplistic in explanation, but I am sure you understand the "jist".
MOST "INSURANCE" of any kind today is based upon this simplistic strategy that the "house" must MAINTAIN any and all EXCESS of contributions into the program by all participants as a HEDGE AGAINST LOSSES the following year.
Now here is where it gets UGLY. In legalized gambling, participants are not FORCED to 'bet' more each time they bet. However, in the Insurance Industry, the participants are demanded and expected to "pony up more money FOR THE BET!"
This is why you see the ridiculous fees that Insurance Companies Charge.
It is a clear conundrum of ridiculousness.
Or is it?
Are you still saying "HUH?"
Look at it this way...
If you and I were at a CRAPS table in Vegas...would you be a better Dice Shooter than I? Of course not. The dice KNOW NOT who "threw them"!
This is the crux of where the Insurance Industry has taken the 'gambling industry' to the 'next step beyond'.
"How", you ask?
Well, they analyze STATISTICS. By gosh, so do the gambling casinos!
The most fascinating thing I viewed this weekend in Vegas were the NUMBER OF "Hidden Smoked Globe Cameras" in the Ceiling, ever present, watching like a HAWK.
The Insurance Industry uses these same "cameras" in the form of "STATISTICS".
I think I have digressed here, but I think that you see my point. And the point is...
THE INSURANCE INDUSTRY IS SELLING "A DREAM". JUST LIKE THE GAMBLING INDUSTRY SELLS. The "dream" that both of these industries sell is "peace of mind".
In Vegas and Atlantic City, gamblers are lead to believe that they have the potential to be adequately able to "break even on their investment" and perhaps to even get a
PROFIT!
In the Insurance Industry, participants are lead to believe that they have the potential to be adequately able to "PROFIT on their investment" or at LEAST "break even".
Do you SEE the similarites in the differences?
Gambling makes you a "CONFIDENT LOSER"
Insurance makes you a "RELUCTANT WINNER"
This was fun to analyze and chat about, I hope it makes it all clear to you now.
4 to 1 ODDS says it DOESN'T! LOL!
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