[vlovich123]

Insurance companies (of any kind) are not incentivized to find the cheapest service. Anything they pay out is passed on via premiums. Indeed, the more expensive service is better because a 2% profit on $1000 makes them 10x more profit than 2% profit on $100.

There’s some competition here in that a marketplace of insurance companies can compete on the premiums so there can be downward pressure, sometimes. But for things that impact all insurance companies like this equally, then insurance companies would also be opposed because more expensive repairs = more money in their pocket.

That’s why you see things like medical insurance not being aligned with lowering medical costs.

[unyttigfjelltol]

The facts in your post are wrong. Insurance companies establish rigorous processes to steer repairs to the low cost provider and push that provider to make only necessary repairs. Policy holders might go along with it and might not, same as other insurance scenarios.

[kwhitefoot]

> steer repairs to the low cost provider and push that provider to make only necessary repairs.

That's not my experience in the UK and Norway. At least with the good insurance companies. I creased the rear passenger door of my Tesla S in the UK three years ago. It was purely cosmetic damage confined to a 10 cm diameter area at the front bottom corner. My Norwegian insurance paid 4 kUSD for a new door skin and a repaint of almost the whole side of the car at the Tesla recommended body shop and ten days of car rental.

It's interesting to see how such things differ from country to country and insurer to insurer.

[lotsofpulp]

> That’s why you see things like medical insurance not being aligned with lowering medical costs

Health insurance companies are lambasted all the time for denying coverage for certain procedures or medicines or requiring prior authorizations to prove it is medically necessary or evidence based treatment.

[monocasa]

They do both to carefully approach the 20% overhead allowed by the ACA. Denying claims wholesale, and allowing the claims they do approve to increase in cost year over year greater than inflation so that they can make the total pie that they take 20% of greater each year.

[lotsofpulp]

Then why do some of them exceed the minimum medical loss ratio by quite a bit? Why did Elevance simply not deny more claims so it could get closer to 80% rather than 90% and book more net income?

https://www.oliverwyman.com/our-expertise/insights/2023/mar/...

> MEDICAL LOSS RATIO TRENDS

>Reported loss ratios are 89.4% for Elevance (fka Anthem), 86.0% for CVS Health (Aetna), 83.8% for Cigna, and 82.8% for UnitedHealthcare. Loss ratios have been impacted by seasonal patterns and the return to more stable utilization than seen in 2020.

Seems like an unsubstantiated conspiracy theory.