On why large corporations should not exist
- Thread starter johnbryanpeters
- Start date
I’ve seen the use of “dropped” to imply they canceled policies still in effect. I’ve also seen that the insurance companies decided to not renew existing polices as they expired. These things are different, but in no way does it dismiss the tragedy of the fires. It does show that the insurance market is a market. The sellers looked at the risk vs return and decided what made sense for them as a business. It’s a pretty good indication that while this event is unusual it wasn’t unforeseeable.
…I don’t know that a mass exodus from the region when people living there saw the issue on the horizon would’ve been a realistic response.
…I don’t know that a mass exodus from the region when people living there saw the issue on the horizon would’ve been a realistic response.
Like most things in life, it’s complex.
We live in fire country and have both residential and commercial buildings on our property.
We were able to find one company in the US that would offer us “residence/domicile” insurance, but not “homeowners” insurance. The former doesn’t cover nearly as much. There is also “last resort” insurance that we could buy from the state, but that is very expensive and doesn’t offer great coverage.
On the commercial side, we’re on our own if we burn down. No one, not even the state, will give is the time of day. That means that any capital investment on our part has to be cash and we are at risk of losing it in a fire with no recourse.
And, yes, we fucking maintain the forests and open spaces on and adjacent to our property. We also have 20k gallons of water on hand (in tanks) at all times and the ability to spray it without grid power.
That’s our reality.
We live in fire country and have both residential and commercial buildings on our property.
We were able to find one company in the US that would offer us “residence/domicile” insurance, but not “homeowners” insurance. The former doesn’t cover nearly as much. There is also “last resort” insurance that we could buy from the state, but that is very expensive and doesn’t offer great coverage.
On the commercial side, we’re on our own if we burn down. No one, not even the state, will give is the time of day. That means that any capital investment on our part has to be cash and we are at risk of losing it in a fire with no recourse.
And, yes, we fucking maintain the forests and open spaces on and adjacent to our property. We also have 20k gallons of water on hand (in tanks) at all times and the ability to spray it without grid power.
That’s our reality.
Just to break from the narrative of hating on large companies for a moment, and I’m aware this gets into “too big to fail” territory…
abcnews.go.com
$30 billion of insured costs and $10 billion of additional uninsured costs estimated for $40 billion of damage estimated. What would that do to the insurance companies? Would it bankrupt them? It would certainly create solvency issues. What’s that ripple effect across the country for other policy holders? I’d imagine people across the US would be and already are being impacted by the claims from this disaster. This isn’t unlike the water supply for fire hydrants - the system was built to anticipate a certain number of localized events, not regional devastation at a record level.
Los Angeles fire losses could reach $30 billion for insurers
Disaster already the "costliest wildfire event in California history," report finds.
abcnews.go.com
$30 billion of insured costs and $10 billion of additional uninsured costs estimated for $40 billion of damage estimated. What would that do to the insurance companies? Would it bankrupt them? It would certainly create solvency issues. What’s that ripple effect across the country for other policy holders? I’d imagine people across the US would be and already are being impacted by the claims from this disaster. This isn’t unlike the water supply for fire hydrants - the system was built to anticipate a certain number of localized events, not regional devastation at a record level.
Now tell me what their profit was last year.
Is your google broken?
Looks like State Farm publishes and combines Auto and Home
Looks like State Farm publishes and combines Auto and Home
I’m not saying the insurance companies aren’t counting their blessings for making a business decision before they were on the hook for a huge bill. I’m also not saying they couldn’t have handled more claims than what they are going to be presented with. But let’s also not pretend these are hand made artisanal policies being crafted for love of the insurance game. These companies are not government agencies in service of the citizens, providing equal benefits for all. When the rubber hits the road, businesses gonna business.
Perhaps, insurance should not be a for-profit venture?
Insurance in its simplest form was to mitigate (accommodate or account for may be the better choice of words) individual risk by spreading it across the collective. When the collective is big and diverse enough AND no one is taking multimillion salaries AND no shareholders are earning dividends, this works. Profitizing breaks the system.
Insurance in its simplest form was to mitigate (accommodate or account for may be the better choice of words) individual risk by spreading it across the collective. When the collective is big and diverse enough AND no one is taking multimillion salaries AND no shareholders are earning dividends, this works. Profitizing breaks the system.
Not to mention it’s basically required to get a mortgage and buy a house. Gotta protect the collateral assets for the lenders. I suppose the private insurance and mortgage industries create some sort of an appearance of division between the government and private markets. If the government provides insurance in order to remove the profit seeking of corporate ownership then it puts them one step closer to the banking industry. There are certainly mutual goals and interests, and the allowance for tax and interest deductions (in the USA) already creates a visible link. Making the government completely responsible for home insurance to protect collateral for the banks doesn’t strike me as comforting.
Why wouldn’t you want a nationalised bank? Haven’t you realised that the more vital a service is, the more it should be in the hands of the public?
The problem in the US isn’t the threat of nationalisation, it’s that the government itself is an agency for corporations. Fix that and you’ll fix sooooo much stuff.
Death by Consumption
We’re all dying to hear those holiday sales figures. Literally.
nationalised banks are a generally a terrible idea.
corruption allocated, nationally backed loans really suck
at the most basic, economical power backed by political power is indistinguisable from political power backed by economical power.
you are just trading the players. one is the oligarchy, the other is the ruling party.
I believe market economies are key, but there has to be competition. No single entity should be allowed to control more than 15% of any market.
you are just trading the players. one is the oligarchy, the other is the ruling party.
I believe market economies are key, but there has to be competition. No single entity should be allowed to control more than 15% of any market.
The problem currently, I think, with market economies is that there has been a shift in how businesses are valuated. A business is seen to have higher value if provides excellent benefits to shareholders.
In an ideal situation, businesses would provide good value to its customers. Shareholder value would be naturally occurring result of good customer value. That is absolutely not how it works right now. Take, for example, um…the insurance industry.
The quality of the product provided to the customer must be decreased/ scaled back as much as feasible to reduce costs (“COGS” and overhead). Prices must be held steady or increased.
In the case of the insurance industry, call centers and restrictions on coverage are examples of cost cutting / quality decrease. No insurance premium ever in the history of the universe has ever gone down year on year.
In situations, markets, geo regions, etc where the value generation for shareholders equation doesn’t work, the company stops doing business.
Forcing the company to do business in an economy an unsuited market will kill the company off. See the attrition of health insurance providers as a result of ACA.
Sorry, but I really see no way to justify private for-profit insurance business. It cannot work. I mean, come on, it’s NOT working meow…
In an ideal situation, businesses would provide good value to its customers. Shareholder value would be naturally occurring result of good customer value. That is absolutely not how it works right now. Take, for example, um…the insurance industry.
The quality of the product provided to the customer must be decreased/ scaled back as much as feasible to reduce costs (“COGS” and overhead). Prices must be held steady or increased.
In the case of the insurance industry, call centers and restrictions on coverage are examples of cost cutting / quality decrease. No insurance premium ever in the history of the universe has ever gone down year on year.
In situations, markets, geo regions, etc where the value generation for shareholders equation doesn’t work, the company stops doing business.
Forcing the company to do business in an economy an unsuited market will kill the company off. See the attrition of health insurance providers as a result of ACA.
Sorry, but I really see no way to justify private for-profit insurance business. It cannot work. I mean, come on, it’s NOT working meow…
I can remember my dad saying something very much along these lines 3+ decades ago.
The older I get, the more I realize my dad was a gigantic fucking hippie. He certainly wouldn't have put it in those terms, but the evidence certainly exists that he may have been a closet communist.
And he was right. Which is something that makes me very uncomfortable to say about my parents.
You're assuming the rules, regulations and oversight allow and are set up to encourage corruption. This doesn't need to be the case, as we can see from many many examples around the world.
I generally totally agree with this but I would point out that actually some insurance premiums do and have go down, especially when behaviors can be shown to change or risks are quantified more accurately.
Correct.