[anamax]

> Another important factor here is the amount of reserves that are held back from each $1 of premiums input into the system.

You're forgetting that insurance companies invest that money.

There are times when claims payout exceeds the premiums, yet insurance companies still manage to make money because of the investments.

As always, if you think that you can do insurance better, go for it. If you're right, you get rich and drive them out of biz.

[GFischer]

I work for an insurance company.

The company makes an operational loss, but it makes a killing in the financial market, and is thus (very) profitable.

Claims don't exceed the premiums, but it's narrow.