Thinking: the internet will crush businesses that rely on information asymmetry or opacity. Some biz models depend on occasional "bargains," like hiring a 5x dev for a 2x salary, or insuring a 5x safer driver for 1/2 the premium. These models will struggle more & more over time.
-
-
I'm not sure I understand. If I'm a 3x safer driver but only get a 20% safe driver discount, doesn't that mean my premium is subsidizing other drivers?
-
I think actuaries doubt the existence of 3X safer drivers. There is no underwriting edge capturable versus the usual table; controlling for your age, gender, and zip code, you're actuarially indistinguishable from their worst insurable risk.
- 1 more reply
New conversation -
-
-
Deposit pricing for retail and small businesses, though, that's a giant case of "The financial industry collects 150+ bps per year because you didn't have the sophistication to ask for it."
-
Peanut gallery: what do you think is the typical balance of a) a mid-career US dentist or b) a technology company with 20 employees kept in cash, what do you think the APY they're getting on that balance is, and how many hundreds of billions of deposits are priced in same way?
- 6 more replies
New conversation -
-
-
Most insurance (auto or otherwise) pays out more in claims than they take in. This calculation is called the “combined ratio” and sometimes exceeds 100%. P&C insurance in CA had an average 124% CR last year.
-
So how do they stay in business? My one second of research on Investopedia says that other revenue streams aren't taken into account, so they could be profitable on that basis, but what other revenue channels would be enough to compensate for that high of a ratio?
- 1 more reply
New conversation -
-
-
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
If I'm understanding you correctly, I don't think this is true. Progressive made huge gains in the 90's/00's with the "we'll show you competitors rates" strategy. It was a nice benefit to the shopper but it was meant to leverage their underwriting edge. 1/2
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.