"prodigal1" wrote in message
...
News f2s wrote:

As for those who have been criticising the profit motive of
insurers (and suggesting public insurance) earlier in this
thread, most of them did not understand the business model.

Au contraire mon frère,

Ah. French. Strong believers in the (old soviet idea) that the
state can always do things better.

I understand the business model perfectly.

I did say 'most', so you're allowed to differ in your views.

What I don't understand is the lemming-like response of
consumers of insurance products. The product marketed by
private companies don't meet the consumer's needs, yet for some
inexplicable reason the consumer continues to purchase a
poor-quality good.

It's called persuasive marketing. Personally, I'm scared stiff
that certain incidents could remove a vast amount of my wealth and
tie me up in court for a few years. So I buy insurance . . . third
party for driving boats, cars . . . also for medical insurance
while travelling in USA. It may be your opinion that this is a
poor quality good. I hope you have the financial resources to
handle any third party claims which may arise due your actions.

Each person will make their own judgements about the degree to
which they wish to self-insure. I, too, think that many people
don't recognise a lot of poor value products. Not just in
insurance, but in the whole range of products available to any
consumer. Fine. That's the market place.

By all means let public insurance compete with private
insurance. But you need some safeguards to make sure that that
cash flow doesn't disappear into the public spending maw.
Because it's going to have to be re-paid! By whom? The
taxpayer.

Nonsense.

Why nonsense? If I accept that your one public example is well
run, that does not prove that what I said is nonsense. It merely
means that (in this instance) appropriate safeguards are in place.

Publicly run insurance companies such as the Insurance
Corporation of British Columbia are profitable entities. These
profits reduce the pressure for increases in property tax rates
in BC. Roads, schools and hospitals are not a "public spending
maw". Private insurance companies have outlived any usefulness
they may have had to their customers.

I would hazard a guess that private insurance had set the
standards which public insurance had to improve on. And I would
hope that private insurance is still available to compete with the
public products. If not, you have a classic monopoly problem - no
checks on costs, no incentive to innovate and improve.

The fact that the public insurance business is used to finance
infrastructure development may (or may not) be a good investment.
I'm sorry I called it a 'public spending maw'. This finance
reduces the public borrowing requirement - improves the balance
sheet. This is a popular wheeze with governments and companies
alike. Disguise the debt.
--
JimB
http://www.jimbaerselman.f2s.com/
Describing some Greek and Spanish cruising areas