*Profits of insurance companies are limited by regulators to about 4.5% — hardly enticing to investors, considering the risk of hurricanes.
However, insurance executives in Florida have used financial workarounds to reward investors and themselves.
While the profits and executive compensation of the insurance company are capped, the profits of affiliate and parent companies are not.
So executives create sister companies that charge the insurance company for basic services, such as claims handling, underwriting, accounting and issuing policies. (Large national insurers typically handle all of those services internally.)*
Am I missing something, or are we really outraged over how for profit insurance of any kind works? Nationalize it, regulate it, or get used to it. Those have always been your only options, too bad reigning in capitalism is woke.
Also in Florida we have a state owned and run insurance company of last resort, and people hate it and are constantly trying to downsize it. Then when, surprise surprise, people get forced onto private insurance companies they hate it even more and have big regrets.
Yeah… fuck socialism. Not hurting ourselves to fuck those freeloaders is patriotic! /s