I used to have a reinsurance company as a client. For those unfamiliar, that’s an insurance company that sells insurance to insurance companies. Example: You buy a $1,000,000 automobile liability insurance policy with a $1,000 deductible.
If the insurance company doesn’t sell enough of these kinds of policies to reliably offset payouts with premiums, they might turn around and buy a policy from a reinsurance company with a $10,000,000 limit and a $100,000 deductible against their entire portfolio.
Thus, reinsurance companies spend a lot of time thinking about things that don’t happen very often but can be very expensive when they happen.
And yes, they had a division that did propositions like hole-in-ones, and also they insured legal betting companies against wild trifectas and that sort of thing.
I have a small trove of stories they told me about bizarre accidents that wound up costing enormous amounts of money.
If the insurance company doesn’t sell enough of these kinds of policies to reliably offset payouts with premiums, they might turn around and buy a policy from a reinsurance company with a $10,000,000 limit and a $100,000 deductible against their entire portfolio.
Thus, reinsurance companies spend a lot of time thinking about things that don’t happen very often but can be very expensive when they happen.
And yes, they had a division that did propositions like hole-in-ones, and also they insured legal betting companies against wild trifectas and that sort of thing.
I have a small trove of stories they told me about bizarre accidents that wound up costing enormous amounts of money.