Insurance is gambling
by Randy Gingeleski
2 minutes to read
I'm working in the insurance world now, and insurance isn't so different from gaming.
Both businesses rely on applied statistics. Formulas applied to real life, money goes back and forth, but the odds prefer the business.
Image credit - 365PSD
Instead of dealers you have brokers (“loose”) and agents (“tight”). They all have to be nice to you in order to earn a living. Though agents can walk away from “players” who are assholes.
Casinos do get the bonus of variance. The theoretical house edge could be 0.5% on a blackjack table, though that’s based on 100 million trials and both sides having unlimited bankroll. The house has more money than you do. When you lose your $100, you’ll probably leave. It’s not like you’re seriously getting $0.995 back on every $1 put forth. 20 hands may do you in.
They also have the luxury of a defined scope. What I mean by that is – casino games are predictable. In life, which is what insurance quantifies and wagers on, things are wild. Technological advances change your house, car, and personal property. Medical advances change mortality rates and life expectancy. Pollution changes the weather and can make for more severe storms.
People have a love-hate relationship with both businesses. Sometimes the customer wins or their policy covers them for something dire. Other times the customer loses, or an insured hasn’t had to used their policy in forever.
Partly because of that, and partly because of how much money they deal with, both donate a lot. Gambling gets taxed heavily so schools can benefit. Insurance companies tend to improve the communities they serve.
Gambling is hospitality and bringing formulas to fruition.
Insurance is hospitality and bringing formulas to fruition.