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Originally Posted by rumatt
Sounds pretty pointless, but at the same time what's the downside for them? Some percentage of customers are just going to walk in and say sure I'll take the default Insurance I've heard it's good.
The insurance business seems like a way to print money. Why isn't everyone in it?
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Profit margins on the actual insurance risk are pretty small - $0.05 or less per $1 of premium for standard personal lines coverages. But there is a time lag on average between when you pay premiums and when they pay claims so the investment income on the float can generate good return. It’s made Buffet a lot of money over the years.