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Mental

The turkey under the butcher’s knife

Have you ever wondered how do insurance companies make money? How exactly?? We have heard of some actuarial scientists yes who do all the dirty calculations and who are generally intelligent. However one cuts it, insurance companies must make profit from arbitraging the perceived risks between the issuers (i.e. the insurance companies with all the geeky actuarial scientists) and the buyers (i.e. the rest of us who buy insurance premiums). It then follows that whatever the insurance companies earn, they earn from our collective overestimation of perceived risks.