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chrischen
on April 7, 2020
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Some auto insurers are sending refunds to customer...
But the insurance companies still don't get to pocket that money if the costs are increased, how does it incentivize them?
lasdfas
on April 7, 2020
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It's normally not a fixed amount. It's generally a percentage above costs. If all costs increase, they increase their revenue. They get the same percentage of a bigger pie.
freepor
on April 7, 2020
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Basically, if an industry is limited to “cost plus” profits (eg 5% of payouts) their incentive is to drive payouts as high as possible.
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