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by cortesoft 810 days ago
This is why you have re-insurance

https://en.wikipedia.org/wiki/Reinsurance

If the final insurer is the government, you don't have the risk of ruin because you have control of the money printer.

2 comments

Reinsurance isn’t magic. This helps with one-off losses, but if you’re fundamentally not able to make a profit, they’re not going to cover you, because all you’ve done is shift the negative expected value to them.
It also probably increases the odds of total ruin... think a Katrina or an Andrew but a bit worse. On a smaller scale, it's never gonna be just one car in a town with hail damage.
It also probably increases
If money printer goes brr… you’re losing, not winning.