(You must mean premiums collected divided by payouts and claim expenses. Otherwi... | Hacker News

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		waterhouse on March 20, 2017 \| parent \| context \| favorite \| on: What makes gambling wrong but insurance right? (You must mean premiums collected divided by payouts and claim expenses. Otherwise, if the inverse ratio were 1.20, that would imply that insurance companies were losing money.)

patio11 on March 20, 2017 [–]

Inverse of loss ratio answers the question "Would I pay $5 to purchase $1 of claims with an expected value of $1?" No; you'd pay far closer to $1.20.

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