[legion]

Originally Posted by Moses

Insurance companies make a fortune "on the float".

They delay payments for months and months. It's a very profitable game. Sometimes they claim that the doctor hasn't submitted the proper paperwork, or claim that the patient's insurance has lapsed, or state that they have already paid the claim. The excuse is never valid, but the delay in payment is very profitable.

Warren Buffett makes a fortune off of float. Many other insurance companies use interest on the float to reduce premiums--directly benefitting policyholders. This is one of the reasons (the other prime reason being that fraud tends to explode) that insurance rates often go up when the economy tanks--the stock market can't be used to subsidize the cost of insurance.