In simple terms premiums minus claims equal profits for insurance companies. I hate to say this, but your statement isn't accurate. Aside from life insurance (which is strange beast), most of the time insurance companies lose money on their premiums vs. claims because by the time you add up the direct costs of the claims (money paid out) plus the administration, distribution and other overheead, you are over the amount of premiums collected. The profit largely comes from the companies investing the pools of money waiting to pay claims. Yes, insurance still is a raw deal if you can afford to cover the potential loss, but its not quite that raw a deal.
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