Hacker News new | comments | show | ask | jobs | submit login
What makes gambling wrong but insurance right? (bbc.com)
294 points by sohkamyung 101 days ago | hide | past | web | 255 comments | favorite

Article gives a good background, but doesn't clearly answer it's own question. The simple answer (although not followed as closely as it should be in regulation):

Gambling involves the creation of risk where none previously existed, while insurance is solely about the transfer of risk from one party to another (or more than one).

Driving a motorcycle also involves the creation of risk where none previously existed. But people seem to make a rational choice to get on their motorcycle.

The risk of losing money gambling to me seems less relevant than the risk of getting addicted to gambling and making irrational decisions. There's a 100% chance that when I buy a BMW that I'll lose money, but of course no one believes there's a problem with car addicts that the government needs to solve. There is, however, a real problem of gambling addicts, not too different from heroin addicts.

That said, solving the problem with prohibition creates the normal prohibition problems (rational adult gamblers lose their rights, black markets are setup, etc). I tend to like the self banning programs that many states have set up. If you feel you are addicted, you can sign a form banning yourself from casinos for a period of time / life. If you go back, you can be arrested for trespassing.

And of course, the governments do-gooder motivations seem suspect when the government makes lotteries illegal, but then sets up their own lottery monopoly with absurdly low payout rates.

>Driving a motorcycle also involves the creation of risk where none previously existed. But people seem to make a rational choice to get on their motorcycle.

That's because there are concrete benefits from doing so (going from one place to another). And even with that, there are all sorts of regulations for getting a license to drive a motorcycle, where and how to drive one, what to wear while riding one (a helmet is mandatory in many countries), etc. And even so, if motorcycle related accidents where that many that it would matter, driving one would have been outlawed altogether probably.

>There's a 100% chance that when I buy a BMW that I'll lose money

Yeah, but you also get a BMW. With gambling you on average just get nothing.

Gambling is entertainment, the same as going to see a movie or listening to music. You don't get anything in return other than what you experience going through it. I agree that comparing it to buying a physical product may not be the best metaphor, but I can understand where it's coming from.

In the end, it becomes a problem when it's no longer entertaining (just a game), but rather pathological.

The house edge on well-played blackjack is only a few percent, and the highest-payout slot machines are similar. Which means that a low-limit player can keep their losses down to a few dollars pretty easily. So stingy gambling is actually pretty similar to music and movies in dollars-per-hour terms.

I've certainly seen movies bad enough that I would have happily spent my money playing dollar blackjack instead.

When I interned in Las Vegas, I often joked that it was cheaper and just as entertaining to go play some flashy slot machines vs going to the arcade.

Right, and a lot of people forget that when comps are thrown in the edge is whittled down even more, if it exists at all. If I went to a bar I'd be ordering drinks, maybe paying a cover charge, but instead I get "free" drinks while I gamble.

Craps is also a very low (<1%) house edge, and it's a more social and exciting game compared to blackjack (to me atleast)

> Craps is also a very low (<1%) house edge, and it's a more social and exciting game compared to blackjack (to me at least)

This is an even better example. I didn't cite it because I couldn't remember the edge on good play, but it's a solidly social experience which can be had for a very reasonable price.

I think he means that he gets the pleasure of having/using a BMW compared to a gambler who also gets the pleasure of gambling. Both are forms of entertainment and both cause you to lose money.

>Both are forms of entertainment and both cause you to lose money.

In one of them you get a luxury item -- with both use value, status value, and resale value.

In the other you get nothing at all. Not even status.


Gambling certainly gets you status - walk around Vegas and check out the businesspeople playing together. Or for a non-casino version, read about people playing Liar's Poker on Wall Street (in, aptly, Liar's Poker).

And on a smaller scale, it gets you enjoyment. I've had some fun times playing low-minimum blackjack, chatting to other players and the dealer. It got me "nothing at all", but in the same sense that a concert or the markup on drinks at a bar gets you "nothing at all".

>Gambling certainly gets you status - walk around Vegas and check out the businesspeople playing together.

It's the money (they can spend) that gives those businesspeople status.

Nobody looked at them and said "they are gamblers, hence they have status".

>And on a smaller scale, it gets you enjoyment.

Heroin too. But nothing lasting and nothing sociably valuable.

Ok, but I'm not a gambling addict, and most people who gamble don't become addicts.

I know people who are literally homeless because they'd rather spend their money following bands around. Some of those bands are too niche to be "socially valuable". Does that mean we need to equate music with heroin, too?

The existence of addicts, or the lack of a social movement or physical product, does not determine whether something is worthwhile. Applying your standard would cut out everything up to "going for a walk in the woods", unless by socially valuable you just mean "things I find aesthetic".

Some people enjoy playing games and think they are good enough to wager money for it. It's not unreasonable for people to go to Vegas or Atlantic City with a disposable cash budget of how much they can gamble away. You just factor it into the cost of the vacation. It's entertainment, losing sucks but it's always fun to win even if you are still down from what you started with.

For some people, luxury cars are a waste of money. Everyone has their own priorities on what is important to spend their money on. Some people like expensive cars and spend their money on it. Some people just want something that won't break down and can get them to work so they can spend their money on whatever hobby they really like.

"no one believes there's a problem with car addicts that the government needs to solve"

If you drive almost any highway in Germany, you'll see a great number of (goverment-funded) posters against speeding. If you commit enough driving offences, you may need to pass so-called "medical-psychological examination" (MPU - "Medizinisch-Psychologische Untersuchung") which is dubbed "idiocy test". This will cost you time, money and dignity. There are also campaigns agains short-distance driving etc.

So I think what you say is not true, quite many people believe that there is a real and present problem with car addicts that the goverment needs to solve.

isn't that a different addiction from what the parent post is about??? the parent post is about 'buying car' addiction, while your 'addiction' is about bad driving stuff

You are right, it is a different type of addiction.

buying car vs driving a car for pleasure vs excessive speeding

buying medicine vs using medicine vs drug abuse

And urban centers have banned cars (or cars that pollute above a certain amount) entirely.

but of course no one believes there's a problem with car addicts that the government needs to solve. There is, however, a real problem of gambling addicts, not too different from heroin addicts.

Not necessarily disagreeing, but it raises the specter of double sided moral hazard: what about people who buy houses near flood plains and either don't insure or under insure them because they expect emergency relief government funds to rebuild and thereby recoup their loss at public expense? What about young people for whom health insurance premiums are uncomfortably high, so they instead show up at the emergency room and don't pay? What about parents who do not purchase life insurance and if one dies, the othe goes on public assistance? I realize this may be a US centric issue.

A motorcycle or car is a fungible asset, and it's the use of the asset that's enjoyable. Gambling is not. It's effectively a service.

Buy a Harley/BMW, and come to regret it? You can sell it, and claw back at least part of your mistake. (and if you bought it Used in the first place, that sidesteps most of the depreciation argument)

Blow your paycheque gambling? You have no recourse.

I know that your mention of "car addicts" was just a throw-away example, but that is actually a strikingly apt metaphor for America's unhealthy dependence on the automobile.

The fact that you can essentially volunteer yourself to be arrested seems absurd to me. Do you have any details on that kind of program?

I'd say the fundamental difference is that gambling sometimes provides a huge payout after a small loss, whereas insurance provides a payout roughly equal to the loss.

Insurance isn't supposed to have big paydays, it's just supposed to make you whole. Your house insurance might pay out a million dollars, but only if that's what it actually costs to rebuild your house.

It's telling that when insurance starts to get away from this model, like people insuring stuff for far more than it's worth, or taking out life insurance policies on strangers, both the law and morality start to frown it.

I think I would refine that a bit as, insurance [1] involves payout on an event the insured doesn't want to happen [even given the payout], while a gamble is where the insured does want it to happen [because of the payout].

This matches the historical and in-practice role of the insurer: they try to keep you from overinsuring things, or insuring things you don't have an interest in preventing from happening ("insurable interest"). Both of these create a so-called "moral hazard", the same category that make gambling bad, and vastly increases the fraud they have to deal with.

[1] or rather "the kinds of risk transfer we want to allow" vs those we don't

That's easy to get around. I don't want Duke to win the NCAA Tournament. I will pay you $X to insure against that happening, but if it does, my insurance policy kicks in to the tune of $Y.

You mean easy to get around if that's what the law actually said? Sure, the distinguisher I gave doesn't easily translate into cheaply applicable test that law enforcement can use; it's more for identifying categories of activities that look more like gambling vs insurance so that lawmakers can identify which are worth banning. It's hard to externally identify that on individual cases.

With that said, given appropriate modifications, your example could legitimately be called insurance. If

- There were a quantifiable decline in prestige from the loss (per sibling comment), and

- the payout were low enough that the insurer thought that you'd still prefer winning to loss+payout, and

- this were a common enough thing

Then yes, it would look a lot more like insurance and merit being regulated like that and less like gambling.

Here's an interesting and topical example: the "billion dollar bracket" challenges you're seeing right now with the NCAA Tournament are all insured. The company offering the "prize" isn't going to be out $1B if someone hits a perfect bracket; they've got insurance to cover the event that someone wins. (The cost of that insurance is rumored to be around $10M.)


Those challenges are all free, though you could get really deep and argue that consumers are paying incremental value for providing email addresses and marketing leads to the customer.

By the way, this example is really fun because you can re-word it to: "I'll bet you $1B at 100:1 odds that no one will get a perfect bracket."

Imagining the competing school insuring themselves against the loss in prestige/recruiting that would come from that loss

The fundamental difference is that gambling is an added risk (generally, and the exceptions are often illegal even where gambling is legal otherwise [0]), where insurance is a hedge against an existing risk; both decrease your expected financial return, but gambling also increases risk while insurance decreases it.

[0] e.g., someone formally attached to a team in a sport and having a financial interest in their performance also betting against the team as a hedge.

Insurance can also make existing risks more acceptable and thus lead to more risky behaviour. E.g. if someone has 0$ co-pay/deductible for car crashes they might not drive as carefully because who cares, it won't cost me anything right? (well until they jack up premiums). So crafting insurance policies and rates takes a lot of care, but the profit motive is a strong driver here.

> Insurance can also make existing risks more acceptable and thus lead to more risky behaviour.

Arguably, that's the entire point of insurance: mitigating the risk of the insured activity so that it is more acceptable as a choice (because unmanaged risk can make an activity less acceptable than average expected net benefit would suggest.)

Life insurance can have huge paydays. The size of the payout is tied only to the premiums paid, not to the size of the loss.

But the premiums are tied to the size of the loss, which is what the payout is supposed to cover.

The loss you're supposed to be covering is your lost income and other less tangible but quantifiable benefits to your family. Although I'm no expert, I'm guessing underwriting becomes more difficult for policies that are completely out-of-line with your income. There has to be some justification for the payout to meet underwriting standards, which in essence is considering the size of the loss. If you're asking for a policy that is very unusual, it will be much more expensive, if you can get one at all.

Yeah, but somebody needs to die in order to collect it. Again, the goal is to make a party whole after a loss.

  gambling sometimes provides a huge payout after a small 
  loss, whereas insurance provides a payout roughly equal 
  to the loss. Insurance isn't supposed to have big 
  paydays, it's just supposed to make you whole.
Not at all! You're conflating "loss" with "payout" in your insurance example. My homeowners insurance might pay me a million dollars ("payout"), but I only pay $5k/yr ("loss") for the policy.

To compare apples-to-apples, gambling sometimes provides a huge payout ("winnings") after a small loss ("bet"), whereas insurance sometimes provides a payout ("winnings") in the event of a loss in return for insurance payments/deductible ("bet").

The "loss" has to include the destruction of your home in addition to the cost of the insurance.

Correct, but the NET benefit is the same.

I place a $5k bet that has a $1M payout. I win, and I'm up $995k. I don't take the bet, and I don't make anything. That's a $995k net ($995k - $0).

I buy a $5k insurance policy against my $1M home. It burns down, and I'm only out $5k (the cost of the policy). I don't buy the policy, it still burns down, and now I'm out $1M. My net is still $995k ([-$5k] - [-$1M]).

The "lose your bet" / "buy insurance but your house doesn't burn down" scenarios are the same either way (-$5k).

I'm arguing that the fundamental difference between gambling and insurance is the presence of a large loss that's necessarily linked to the large gain.

By only looking at the net benefit, you're arbitrarily ignoring that. Of course if you ignore the thing that makes them different, they look the same.

Large is a nonspecific value, as is the valuation of the loss. Is the $1000 life insurance policy large? The limit is practically somewhere around the lifetime administrative costs or we would see even smaller (like you do in non US countries). I don't know the smallest insurance limit in rupees, but it's tiny.

If I knick a priceless artifact (e.g. baseball card), the loss is practically nothing, but socio-economically noticeable via devaluation.

"Professional" gamblers treat gambling as trading time (looking for opportunity, like in Poker) versus risk. Bad gamblers (e.g. slot, roulette, etc) play out games where there is no possible benefit from time investment. No consistent reward for trading any commodity.

There's no difference between many kinds of gambling and insurance, other than the regulations and mediums involved. The insurance companies are still managing risk vs reward.

The difference is whether or not this scenario can happen: you put in some money, get out much more than you put in, and end up far better off than you were before.

With insurance, only the first two parts can happen. The third part can't happen, because the second part only happens to compensate you for a loss. When gambling, all three can happen. Of course, on average it won't, but it's possible to put in a dollar and get out a million dollars with no losses besides the dollar and a little bit of time.

It is sometimes possible to arrange all three with constructs we call "insurance," like taking out a life insurance policy on someone you don't like, but my argument is that this is where we start to see insurance as "wrong" too.

I'm playing the heel here. Your point is well-taken, in that insurance prevents large absolute loss rather than the potential for large absolute gain.

I don't think public opinion is formed on how payouts are based, but on a more general view of social harm.

It's pretty hard to lose your car/house/job to an insurance addiction. Your risk differences are part of an underlying mechanism that results in this outcome.

Well put. And I'd add that insurance is specifically about transferring risk from people who can't handle it to those who can. (Financial derivatives can easily be used to do it the other way.)

You could also say that gambling is net negative sum, while insurance is net positive sum. The positive part being the long-term economic benefit of people not having their lives harmed or ended by low-frequency, high-expense events.

> insurance is specifically about transferring risk from people who can't handle it to those who can.

It is probably true for eg. real estate insurances, but there are also quite a lot of extremely overpriced insurances for all kind of products (eg. cellphone) that people certainly can afford to lose, but they are fooled by loss aversion and hyperbolic discounting.

Or they're not fooled by them. E.g. they know they'll incorrectly discount the regular savings deposits in the future, so they buy the insurance contract as a commitment device.

> I'd add that insurance is specifically about transferring risk from people who can't handle it to those who can.

Those who can, not necessarily those who will. It's not as simple an equation as "transfer the risk and you're good".

Making value judgements on transactions between consenting parties is a fraught endeavor.

And yet as voters we must make these value judgments. Gambling for many is a dangerous addiction, one with significant societal costs. You could look at the financial crash of 2007-8 as being mainly about gambling at the institutional scale.

When transactions are truly consenting (which is not the case with addicts) and have no negative externalities, sure, we should default to letting people do their thing. But when that's not true, voters, who are the real insurers of last resort for societal risks, end up having to make value judgments.

Banking is the single most heavily regulated part of the economy. It is fantastic to claim the financial crisis was caused by solely private actors while dropping the governmental context.

>Banking is the single most heavily regulated part of the economy. It is fantastic to claim the financial crisis was caused by solely private actors while dropping the governmental context.

Banking might be the "most heavily regulated part of the economy", but the regulations that mattered were also disbanded one by one in the 2 decades leading to the crisis.

The government gave free reign to those "private actors".

Besides government, when it doesn't play its role as being there for all citizens interests, is just a lackey for private interests and powerful lobbies (and, no, "no government" wouldn't be a solution: just more of the problem).

Sorry, let me add it back: "The government was lobbied into allowing banks to gamble, and they shouldn't have given in to the banks." Feel better now?

> Before the international banking crisis broke in 2007, the total face value of outstanding derivatives contracts was many times larger than the world economy itself.

Really? I had no clue that it was that bad.

It sounds bad, but it's not particularly hard to get into that position. If everyone just insures their home, the value out outstanding derivates on peoples is already 1x. Now add in everyone that has mortgage insurance that is protecting lenders on home defaults, and you're already beyond 1x for total outstanding derivatives.

I had read that about Iceland, the US mortgage sector, etc. But I had no clue that aggregate global derivatives were so huge.

"for many" is a typical overstatement.

And if I go bankrupt gambling society won't bail me out, I need to get a job.

The estimates of problem gambling are on the order of 3% of the population. I think millions of people constitute "many". YMMV.

If you go bankrupt, that is society bailing you out. We cancel your debts and let you go free of them.

We also won't let your family starve, we'll pick up a chunk of your medical coverage, and you'll be consuming all sorts of public goods without paying your share until you're back on your feet. If you ever get there, because gambling addictions that go as far as bankruptcy can be devastating personally.

Value judgements don't stop when there's consent.

And consent is not a clear, tangible thing that makes it all OK when its given.

An abused woman might justify her husband, for example, and find all kinds of excuses and say it's OK.

Also, just because someone can consent to something because it's better than the alternative, doesn't mean the deal they are given is OK. Someone on the verge of starvation might be OK with a rotten deal. We might just need to assist them and fix what caused them to starve starvation in the first place, instead of validating the "benefactor" that came up with the deal.

So who chooses for all these people who cant be trusted to make their own decisions in your world?

The same "person" who gave you and me culture, language, education, built our roads, invented our inventions, sweeps the streets, creates laws, and more. Society.

>You could also say that gambling is net negative sum, while insurance is net positive sum.

Isn't the second part of this statement false? How could insurance companies stay in business if their profits are negative? Isn't it a net negative sum for the customer base by design of the actuarial tables?

I assume they are speaking to the fact that the amount they pay out + management costs can be higher than they the amount they take in as premiums. It is because all those premiums are invested in the stock market and other vehicles which is where their profit comes from. A know of insurance companies run at -0.5% but the stock market averages up to 8% over any 20 year period.

Basically, we could all do this the same way. Take all the money you pay into insurance and invest it. When you have an incident, take it out. The only downside is if you have an incident larger than what you have invested so far. People also have set up collectives that do this as a group inside of paying others.

It's positive sum with respect to utility, not money. Because utility increases less-than-linearly with money, a 10X loss is more than ten times as bad as a loss of X. So a guaranteed loss of X is better than a 1/10 chance of a loss of 10X. It may even be better than a loss of 9X, and since the insureds are paying 10X in the aggregate, you have a margin to cover overhead.

More than that: it's an exchange of kind - compensation from individual loss is valued much more highly by the policy holder; expansion of the risk pool much more by the policy provider.

The way I phrase the simple answer:

both gambling and insurance are slightly-negative-expectation plays with occasional large payoffs. With gambling the payoff is random, but with insurance the payoff is coupled predictably to an external negative event.

I see it this way: insurance is risk sharing. Gambling is competition. Insurance is about risks to yourself and your property. In betting, you are not compensated for your own loss, but some event that may be a loss or a gain or even neutral. I'd say taking out an insurance against a random person's life would still be betting.

Taking out insurance on a random person's life is also illegal.

I worked in insurance. I am not a fan of it. But you need insurable interest in someone to take out life insurance on them. Otherwise, people would just insure random strangers and then kill them.

This is not hypothetical. One of the forms of insurable interest is key employee life insurance. There have been cases where a business decided to call entry level employees "key employees" so as to take out life insurance, and then these "key employees" kept dying." There have also been historical cases where female serial killers were offing relatives for the insurance money.

"both gambling and insurance are slightly-negative-expectation plays with occasional large payoffs"

When you take in account that personal utility functions aren't linear, insurance and gambling are no longer slightly-negative-expectation, but usually positive.

In other words, if U() is your utility function, U($1M) != 1MU($1). For most people, U($1M) > 1MU($1) and U(-$1M) < 1M*U(-$1).

Wealth has diminishing marginal utility. You're suggesting that it is increasing.

I don't think that's true in the general case. For example, one penny has virtually no utility to me on its own, but there's plenty I can do with one pound, getting more than a hundred times the value from it.

I don't think that's quite what people usually mean when they talk about diminishing marginal utility. Granted, "marginal" was missing from the parent comment, but I gather that was the phenomenon being discussed.

Diminishing marginal utility implies that you gain more utility by acquiring your first penny than you do acquiring your hundredth. Now, at such small levels of money, you could certainly argue that almost nothing is for sale at 1 penny, but once you get above the level where the disutility of carrying around a coin is dwarfed by the utility of the money itself, diminishing marginal utility applies pretty well.

Things may get weird at the scale of pennies or billions of dollars, but at scales relevant for buying insurance or gambling diminishing marginal utility certainly holds.

Losing $10k when you have $20k hurts less than losing $10k when you have $10k.

No, I'm suggesting that it isn't linear, and different people have different functions, even at the same level of wealth.

There are even some techniques to discover and plot your own utility curve, which is quite useful when you're handling things like investing and insurance.

For example:

* Would you give $1 for a 10% chance of receiving $10?

* Would you give $1 for a 9% chance of receiving $10?

* Would you give $10,000 for a 1% chance of receiving $1M?

* Would you give $10,000 for a 0.9% chance of receiving $1M?

* Would you receive $10 for a 1% chance of losing $1000?

* Would you receive $10,000 for a 1% chance of losing $1M?

* Would you rather do nothing or have a 50%/50% chance of winning $1000 and losing $1000?

* Would you rather do nothing or have a 50%/50% chance of winning $1M and losing $1M?

no to all, because any risk is bad, because marginal utility is decreasing.

It's the other way around, "any risk is bad" and "marginal utility is decreasing" are conclusions that you reach from your own function, not that drive your function.

* Would you give $1 for a 1% chance of winning $100?

* Would you give $1 for a 1.1% chance of winning $100?

* Would you give $1 for a 1.2% chance of winning $100?




* Would you give $1 for a 10% chance of winning $100?

> usually positive

Is there an example of a voluntary transaction where the expectation is negative?

Yes, gambling for small wins can be negative, if you don't include the "excitement" or "entertainment" in the utility function.

But then you're not talking about a pure monetary transaction. More like a trade. Which goes back to your point: nobody makes a voluntary transaction where they get less value than they provide.

Take charity donations, for example: people value the warm feeling from helping others and a clear consciousness more than the money they are giving.

Sure, for example buying heroin.

You have to get through a few steps to agree though! You could disagree by saying that people's "revealed preferences" are their "actual preferences", or by saying that people's utility function after accounting for hyperbolic discounting is their "actual utility function."

Of course in the case of heroin addiction it's easy to poke fun at the notion of time-discounted utility functions, but you can't really shrug off the idea, since it's vital to explaining why people do all sorts of immediately neutral or unpleasant things like brushing their teeth, saving money, or exercising.

Not quite: one of the usual characteristics of insurance is the existence of an insurable interest[1]: you must personally have exposure to the risk before you can take out insurance against it. So insurance is really changing a large occasional negative payoff into a smaller more consistent one.

[1] https://en.wikipedia.org/wiki/Insurable_interest

More accurately, insurance isn't about a 'payoff' it's about being made whole after a covered loss. You don't profit from insurance payoffs. Insurance is designed to mitigate risk as opposed to profiting from it.

Insurance is defensive while gambling is offensive.

Your statement clearly states the essential distinction.

A more concrete way of stating this is: the purpose of gambling is to try to earn an outsized return, while the purpose of insurance is to make you whole in case of loss.

There are further benefits to insurance once it gets more advanced. Actuaries, along with experts studying the domain being insured, find an appropriate price for insuring various different options (ex: living by the shoreline vs however many meters inland) which provides a sort of regulation. It gives consumers a well informed number for any given risk. Even more advanced, they'll start to research new ways to make the activity safer. See: Insurance Institute for Highway Safety.

Granted, gambling does give you betting markets which may help predict the future as well. But I would guess for broader topics only. Perhaps someone could enlighten me otherwise.

That's a nice TL;DR

Pooling risks makes things more predictable (not sure what's the avg. profit of insurance companies)

A small correction, it's: "its own question"

>not sure what's the avg. profit of insurance companies

It varies by company and type of insurance but profit margin seems to be in 5% range or so.

Insurance is not transfer of risk. Having many ensurees takes the risk away. It becomes inevitable and predictable. Simply a cost.

It's still a risk. If everyone's houses burn down at once the insurance company will be SOL unless they insured themselves against catastrophes (which they probably do).

Also, arguing by definition is pointless, put since we're already debating pointless semantics, google 'risk transfer' and see what comes up.

The cost is the risk. Many people will pay more into insurance than they get out of it (that's obviously a mathematical inevitability), so those people viewed in isolation would be better off self-insuring. Of course, no one knows ahead of time if they're the ones who will be healthy.

Im talking about the insurance companies. They dont take any risks, since they know in advance how many accidents that will happen. To them it is just a forseeable cost.

The risk of each client is not transferred, but eliminated.

That's simply not true. They work very hard to understand and control the risks they take. But there is an entire field of reinsurance[1], which is insurance for insurance companies against the times they get it wrong, such as major disasters. And even then I suspect you'd find a big enough disaster would break the reinsurance companies too.

[1] https://en.wikipedia.org/wiki/Reinsurance

Which is why reinsurance companies take out so called "super cat" (super catastrophe) insurance. Some of the world's bigger super cat insurers are Berkshire Hathaway subsidiaries; National Indemnity is probably the best known one.

Your definition is good, but you should add that gambling is done for entertainment purposes.

No. Insurance is to pay for an outcome that the insured did not want. A person with car insurance does not want to get into an accident. A person with health insurance does not want to get sick. A person with home insurance does not want their house to get flooded.

A gambler, on the other hand, is indifferent to the outcome of the roulette wheel except for the monetary payout. Same goes for buying options unless there is ownership of the underlying security.

A gambler had an incentive to cheat to make the transaction go their way. An insurer has an incentive to help make the event the insured does not want to happen not happen.

I would add that insurance is also for the purpose of facilitating business and society advancement, while gambling is purely for pleasure.

Risk aggregated among a large pool is lower than the sum of all the individual risks. Systemically, it makes sense to pool risk.

Insurance is pooling the risk, such that incidents become cheaper but more common (here being insurance cost).

And liability. Gambling is your risk. Driving is a risk we take together.

Another way to put it is that the lack of insurance in its turn is indeed gambling. You are imposing a risk onto yourself in order to achieve cash gains, while you could walk away without the risk but with less reward.

After working in or for the insurance industry for 15 years, I came to the conclusion that it is not right, and that it is the moral equivalent of gambling.

I understand that the vast majority of people rationalize insurance as a good thing because the cost is relatively low when compared to catastrophic loss, and even have a couple of personal anecdotes to add to those of the advocates of insurance that demonstrate the wondrous utility of insurance, but I am convinced that it is wrong.

I quit the insurance business and moved to a completely different career. I only buy the insurance that is required by law (what a ridiculous concept! does the government have to mandate that you also buy food?) and have paid the tax penalty for foregoing Obamacare.

I know this will likely not be well received here, but I thought I'd share my position for any who read this and wonder if they're the only ones who understand it this way.

Serious question: What is the alternative to an insurance?

The worst case would be that everybody saves huge amounts of money on their own, not touching it, for the case of a catastrophic event. If the catastrophe doesn't happen, or not as bad as feared, you wasted money. If the catastrophe is larger than expected, or happens when you are too young to have saved enough money, you are out of money despite the savings.

Either way, this is the exact opposite of solidarity. Also, in that setting, not saving any money would be some kind of gamling, too.

Solidarity means that if somebody had really bad luck, their peer will help them, because it could have happened to any of them. But that doesn't work well for large groups. On the other hand, we do want large groups to cover catastrophic events, because only then it is affordable. So we need some entity to coordinate their efforts: An insurance, a state, or something in between like a non-profit organization.

Or, am I overlooking something here?

I am a member of a community that takes care of its members. We are not perfect at it, but then neither are the more common social mechanisms like insurance. I recently had major surgery. The tremendous costs incurred are being paid.

As fragmented as society is today, I can understand why people believe insurance is an absolute necessity, but I also believe that mechanisms like insurance contribute to and frequently cause that fragmentation.

Insurance in particular warps normal market forces. For example, it seems likely to me that the very existence of huge pools of insurance money has contributed greatly to the hyperinflation in health care costs that has continued unabated and really unopposed for the last two generations. My mother told me recently that it cost a total of $80 for her to give birth to my sister in a hospital in 1959. I'm sure the billed cost for hospital birth today is many times that amount. That is an example of the great harm that insurance can do to society, as opposed to any perceived good.

    > I am a member of a community that takes
    > care of its members.
So you and your friends / family / community / church / cult / whatever are essentially implementing an insurance scheme, and yet you think insurance is a bad thing?

    > Insurance in particular warps normal
    > market forces.
So would not having insurance and instead having everyone having to set up some ad-hoc insurance scheme as part of their own community.

Yes because insurance is instutionalized by for profit organizations that do not care about well beeing of those that buy insurance.

Where church, family can be more down to earth and driven by moral obligations towards person that needs help.

That is how I seen stuff working in asian societies, if you are not helping your fellows you quickly find out that no one will help you. Where for profit institution has all incentives to not help or help as little as they are obliged. They also can spend more on legal help which will protect them from spending. Predatory insurance companies are not insuring people who are likely to get sick. Family or church will provide help despite they know that person will have expensive treatment.

Sad thing is that more and more people find themselves with no close family, organizations, because of how society in western countries (cities) develops.

World wide there are a large number of mutual organisations (member owned, democratic, member led organisations) that provide insurance. Indeed for a couple of hundred years this was the biggest segment of the insurance industry.

If you don't want to hand over the gains to a private (or publicly) owned insurer then join an insurance mutual, or if one doesn't exist then start one.

You are a little judgmental if you think that no insurance companies care about the welfare of their customers. If an insurance company doesn't care about customers, soon it has none.

GEICO was founded because they though they could provide needed insurance cheaper direct through the mail, rather than through an expensive army of sales-people. They've saved their customers huge amounts of money over the last 60 years (for disclosure, I don't work for or use GEICO, I actually use USAA which is based on same premise).

In church, you have a leader who is milking the flock for an unconscionable amount of tithing, and a bunch of people milking their religious connections to get more business. Of course they will all tell you to help each other out, it's part of how they scam the flock.

And insurance can only work if it's priced according to it's risks. If you have an expensive illness or are likely to get one, it's actually selfish to think that an insurance company will take a massive loss to help you out. If you had purchased medical insurance from the company before you got sick, you'd still be covered and your costs/risks would have been part of a large pool that was correctly priced at the time.

That's the problem with Obamacare, people wanting a free lunch. It destroyed the private insurance market by banning the consideration of prior health conditions, so now only sick people buy Obamacare. Before Obamacare I paid $400 a month for a $5,000 deductible coverage for my family. My first year of the ACA a similar plan cost $1,100 a month, second year $1,300 a month, and this year it's $1,800 a month.

So now my family is on short term insurance and if I get sick it ends after 6 months. Plus I get to pay massive tax penalties for the privilege of having insurance that's not ACA approved. I'd like to go back to my old plan but the ACA banned it.

>> That's the problem with Obamacare, people wanting a free lunch. It destroyed the private insurance market by banning the consideration of prior health conditions, so now only sick people buy Obamacare.

This isn't true. The incentive of paying penalties is so that young healthy people like me get insurance, so that I can dilute the risk pool for my sicker, fellow citizens. Insurance companies denying you based off of pre-existing conditions was the status quo because it was profitable (for the insurance companies, not for society at large) to insurance mostly healthy people. However, those sick people still need care, and so they end up at the hospital anyways and in doing so, caused outsized (due to severity) externalized costs (that the insurance companies got to avoid by pitting it onto hospitals / government programs). I notice that everyone who claims the ACA's fundamental premise of getting more people into the insurance pool is flawed also mentions their insurance premiums going up. The people (companies) getting a free lunch in this country are those who get to externalize the true and total costs of their actions.

If insurance company doesn't care about customers nothing happens because of power imbalance and fact that market is not rational.

I suspect the implication is that he believes insurance as a market is a bad thing

You're living in a bubble. Almost all civilised countries have some form of single payer healthcare with for example required minimal insurance. It's the US that has hyperinflated healthcare simply because you do not regulate.

How many of those are provably sustainable?

> In its 2000 assessment of world health care systems, the World Health Organization found that France provided the "close to best overall health care" in the world.

> the rising cost of the system has been a source of concern

> Like most countries, France faces problems of rising costs of prescription medication, increasing unemployment, and a large aging population.

-- https://en.wikipedia.org/wiki/Health_care_in_France

> you do not regulate

Inflation of healthcare costs is directly caused by government regulation.

Perhaps you could explain this more? It seems to me that many first-world countries regulate much more than the United States (ie single payer or similar) and have lower costs.

Not all regulation is born equal. When the single payer is also the regulator (which is the case for nationalized healthcare), regulation is introduced to limit the costs. When the regulator is being reelected thanks to the money given to it by the players, there's much more variance in the outcome of the regulations.

There's a lot of bad regulations in the US, on top of my head: public hospitals are not allowed to negotiate the price of medical equipment, so pay 5-10x the price paid in France, for instance. Gross margin of health insurances is capped as a % of the underlying medical cost, so the higher the costs, the higher the profits.

US healthcare system is simply crazy. I (and my family) have very very good coverage thanks to my current job, but I'm out of the country as soon as the situation change (not that I'd have much merit doing so: my visa doesn't allow me to change job, so if I'm fired or my employer collapse, we will have to leave anyway).

Not trying to de-legitimize the claim, but I couldn't find much about hospitals being unable to negotiate equipment prices. Do you have a source?

This. The result here is if you run out of money, sorry pal, you're worthless to society, game over, no one cares, literally go die.

Don't conflate health insurance with real forms of insurance. Health insurance is a weird beast which has an ancillary purpose of what insurance really is.

Most notably health insurance was previously used as a tax free way to provide benefits to employees, has always provided access to phenomenally lower healthcare costs and now legally provides some fashion of free preventative care.

Medical insurance in the form that the USA likes to make it might be bad.

Something like automotive insurance or disaster insurance is completely different.

Bankruptcy is the alternative.

There are legal system problems. The guy who loaned my mortgage has a good idea if I'll pay him back and even then its barely financially sustainable. Making my plumber go thru the same credit gyrations to figure out if I'm about to get into a car wreck and need to declare bankruptcy because I can't pay my car loan without a car and the side effect of that bankruptcy is the plumber gets stiffed as yet another unsecured creditor is asking too much to get a toilet installed and a bill sent. The cost of doing all services as cash and carry is too high especially for general contractors. Imagine a GC on a jobsite having to do payday at the top of every hour handing out cash to every sub.

bankruptcy works as a social policy for financial disasters but applying them to other disasters is a mess. Its more disruptive to have a financial system clogged with bankruptcies due to wild fires destroying homes than to just balance it all out via insurance payments.

You could kinda sorta work around it by exploding the concept of government disaster area financial giveaways to include fender bender car accidents but the government is incredibly inefficient compared to letting little insurance companies provide basically the same service. It would be like calling for a Marine Amphibious Assault Force because a neighbors dog pooped on my lawn.

Banning insurance like behaviors like church food banks would be problematic. Things start scaling up and at some arbitrary point between soup kitchens and current day Catholic Financial Life Inc you'd have to draw a contentious line.

Another similar solution to bankruptcy would be making past due accounts disappear rather than living forever. I had a girlfriend who was judgment proof and didn't make nearly enough money to get health insurance and wasn't set up under medicare either long before obamacare back when most 20-somethings spent some time uninsured. Anyway the collections people tried to collect, but she had nothing, not even worth garnishment, so eventually the debt just disappeared. Without collections agencies, if collecting were more expensive, the end result would likely be a lot of small businesses losing money and the destruction of the credit system oriented economy, which would probably be a net long term positive.

>The worst case would be that everybody saves huge amounts of money on their own, not touching it, for the case of a catastrophic event. If the catastrophe doesn't happen, or not as bad as feared, you wasted money.

How is the money wasted if you still have it saved?

Rather, it would have been wasted if you gave it to the insurance company instead of saving it yourself.

Opportunity cost, inflation, maybe you would be able to invest in something that makes you 100x more wealthy instead of hoarding cash. This could make you so rich that you would not have to keep those savings but you would have "different" savings.

You don't want to keep your emergency fund in non liquid investment or high risk one.

There is always an opportunity cost incurred when personally saving up money for emergencies, but at least you have the principal if/when the emergency never occurs.

However, if you had paid that money out to the insurance company rather than saved it yourself, then you lost both the opportunity cost and the principal.

Those two aren't exactly equivalent, an insurance wouldn't cost nearly as much as the amount you need to save for emergencies. Saving money to mitigate an event that only has a 10% chance of happening requires 10 times as much money than you'd need on average. Even if an insurer asked twice as much as necessary that'd still leave you with 80% of the money free to spend, rather than 100% of it locked up in a savings account just in case.

Ah, so we all give it to the insurance companies...who invest it for us and keep the profits from that for themselves? Why not just e.g. Maintain and ETrade account with enough to cover e.g. Vehicle minimums? In California at least, you can provide proof of financial responsibility in the form of a $35k deposit with the DMV or a $35k surety bond: https://www.dmv.ca.gov/portal/dmv/detail/pubs/brochures/fast...

So your suggestion is to give even more money to the bank so they can invest it for you and keep the profit to themselves? Except in this case you end up paying for all damages. I'm not quite seeing the point of your argument.

Also, my knowledge on Canadian car insurance policies is severely limited, but if you can fulfil your insurance requirements by setting aside a lump sum of money, then I'm assuming you're either still liable for all damage over $35k, or the Canadian government will cover that part, which is still an insurance, except you pay it through taxes.

When you put money in the bank, you're guaranteed to get it back when you want it.

When you pay money to the insurance company, you can't withdraw it, and there's no guarantee you'll ever get anything back from them.

See the difference?

I do think we need to distinguish between kinds of insurance.

Cheap insurance for rare catastrophic loss of high-value capital assets (ie shipping, buildings and contents): fine. The oldest form of insurance (Lloyds).

Expensive small-value insurance (phones, PPI): probably a bad deal for the consumer.

Mandates to insure other people (motor vehicle, public liability, etc): here the cost of the premiums are a useful incentive to avoid inflicting unnecessary risk on bystanders. Although that can make it prohibitively expensive for young people to drive.

Disguised forms of saving (life insurance): it's complicated. Also a surprisingly old product. Maybe best handled by mutual societies rather than for-profit businesses, although the actuarial considerations of estimating death are the same.

Insurance-flavoured things that push the risk outward (credit default swaps): sophisticated investors only, and even then someone's getting taken for a ride. Some cities lost a lot of money by investing in these.

Health: should be dealt with at national level, not the private sector. Nobody should be refused coverage and people should not be financially ruined by medical conditions. I'm quite happy with the NHS system in which private "topup" insurance is permitted but uncommon.

> probably a bad deal for the consumer

Insurance companies make billions in profit each year.

By definition, insurance is a bad deal for the consumer.

Sure, it spreads out the "payments" into a manageable sum in the case of house fire or some other major incident, though by definition, on average, you will pay a lot more for insurance than it will ever pay you.

Yes that's true the average payout rate is 60% IIRC. But due to the diminishing marginal utility of money, it may make economic sense to buy insurance against risks that would ruin you.

But buying insurance for small stuff, you're just donating money to insurance companies.

The biggest scam is 'insurance' for eyeglasses. It's a fixed, predictable cost for most people. Eyeglass frames are ridiculously overpriced, the market is practically a monopoly ran by Luxottica. Insurance companies and Luxottica manage to get people to pay $600-700 for a pair of glasses (300$ for frame, $150 for lenses, x1.5 because low insurance payout rates) by hiding the cost in monthly premiums. No one would pay that much upfront.

Insurance companies making profit doesn't mean they are a bad deal. It is usually worthwhile to trade a small predictable loss for a guarantee that you won't suffer a large unexpected loss. Even if you are wealthy enough to self-insure, it can make sense to buy insurance if they profit you can make by investing that money will outweigh the cost of insurance.

The problem is that the mantra of "maximize shareholder value" often causes insurance companies to engage in practices that are immoral or even illegal. I think the insurance industry in the US is in serious need of a major regulatory overhaul. Perhaps all insurance companies should be forced to operate as nonprofits. Maybe the federal government should start using its enormous wealth of faith and credit to provide competitively-priced, no-bullshit insurance.

Thanks for sharing. Can you go into more detail as to what made you come to this conclusion?

Some guesses:

1) Insurance companies' gross margins are too high, due to asymmetric information, scare-mongering or similar?

2) People buy insurance to cover shocks that they are perfectly able to bear themselves?

3) People buy insurance to cover risks that have effectively zero chance?

4) People buy insurance that doesn't cover them in the way they expect (i.e. the insurance company would deny the types of claims they're expecting to make)?


Interested as well. It really seems like selection bias has a play, but I am just speculating.

Please see the comment above at https://news.ycombinator.com/item?id=13917089.

So you wouldn't have a health insurance if it wasn't required by law? You would just die of cancer? Let your partner or kids die because you don't have the money? I don't understand how not being insured can be legal in some fields.

Also, in my country you are obliged to have an insurance that covers costs in case you cause an accident in traffic. Suppose you would hit me, it's your fault but you don't have money? I don't buy anything from you going to jail, you should have insurance.

Maybe you would argue that the state should in such cases pay, then I could agree with you. The fact that insurance companies of obligatory insurance have stock holders is a perverted concept with big (political) conflicts of interest.

Liability insurance for automobiles is required by law and is very different from a legal requirement to purchase health insurance (you could probably make some argument for liability insurance for contagious diseases, but that's not really part of the health care policy debate).

Health insurance isn't so different. If you have a sudden health crisis, you'll get treatment. If you're unable to pay for that treatment then the rest of us have to pay for it, and requiring you to carry insurance avoids that.

The alternative (barring socialized medicine) would be to refrain from treating people unless they can proved their ability to pay, which sets you up for dying unnecessarily just because you forgot your wallet or something. And I'd really rather not have it be like that.

Of course, our current insurance mandate requires a lot more coverage than is necessary just for that, but at least a big chunk of it resembles the auto insurance requirement.

I do have liability insurance for my car, since it is required by law. I would be prepared to live without one if it became unaffordable. For most of human history, the vast majority of us got around on foot. (In fact, that may still be true, I don't know.) Buses and trains still work, if that's not palatable for some reason. Whole startup companies have been built around getting people from point A to point B in larger cities.

I do not have health insurance. I recently had major surgery that others have helped me to pay for, but I was in fact completely prepared to die, as odd as that may sound to most.

Our lives on this earth are finite. Most people don't deal with that reality in any meaningful way, even when they acknowledge that it is true intellectually.

You strike me as awfully hypocritical. You go on about how terrible insurance is, how lives are finite anyway, how you were prepared to die, and yet you didn't just die, nor did you pay for your own treatment.

The only difference between you and me in this area is that I can admit that I'd rather not die now, and my relationship with the people who would pay for my major surgery is a little more formal.

This business about how health insurance is a terrible idea and you're prepared to die from a lack of it would be a lot more convincing if you were paying for your own care and foregoing major interventions.

People seem to be interpreting the phrase "prepared to die" very strangely. To me, that doesn't indicate a preference for dying over living.

It doesn't indicate a preference for dying but it does indicate that they don't have much preference for living either, when it's the "but" clause after "I recently had major surgery."

I understand the whole thing to be saying, I accept mortality and it wouldn't have been so bad to forego the surgery and die. Which makes me wonder why he went ahead with the surgery and foisted the resulting high cost onto their mysterious benefactors.

I could understand (if not agree with) "I was prepared to die, and it wasn't worth the cost, so I'm dying now." I could understand "I was prepared to die, but preferred to live, even though it came at a high cost." But I can't understand "I was prepared to die, but preferred to live using other people's money, but by the way insurance is terrible and I only buy the minimum required by law."

I understand the objections. Frankly, I was not consulted about the surgery, so the choice was not in my hands. And I have committed all my available funds to paying the bills. And they are not completely paid at this point, but neither do I expect that others will pay them. Rather, others graciously provided funds to help in paying the bills, unsolicited. There was no "Go Fund Me" or similar internet plea for assistance, not even any request by email or phone or in person.

And frankly, I would have preferred to leave here, but it was not my choice. In fact, I have not dealt with it well at times, and even got drunk a little over a week ago. Shameful to admit, but true.

I have commented further in this thread at https://news.ycombinator.com/item?id=13917089 .

"So, second, to me, buying insurance is an act of unbelief."

Well, that's not the direction I was expecting for this. Probably not much point in arguing, since you're not coming at it from a rational perspective to begin with.

Still, I can't resist trying one thing. Do you look for cars before you cross the street? Assuming yes, how is that any less of an act of unbelief than buying insurance?

Of course I look for cars before crossing the street. It is not a question of wandering through life like some errant child doing whatever I please; to the contrary, it requires the full engagement of my human faculties and abilities.

At the same time, I am not so arrogant as to think that I have control over the larger circumstances in which I find myself. The economy could collapse, my family members could fall ill, war and famine could break out, society could become degraded and violent, the government could oppress me and those I love because of our beliefs. To me, it is far less rational to think that insurance or any of the other social structures available today will be of any assistance in those circumstances.

And it is completely irrational to believe that man has created all of the universe, or that somehow order was imposed on chaos without some divine intelligence directing things. On a more practical note, it is also irrational to assume that the very favorable (at least for a majority of the people) circumstances that have prevailed in the U.S. for the last couple of centuries will continue indefinitely. History demonstrates that the opposite of that is more likely in the long run.

But you're right, there's probably not much point in arguing, since you're not coming at it from a rational perspective to begin with. ;p

What is the fundamental difference between looking for traffic and buying insurance? Is it just the size of the effort?

Maybe it's mandated that our lives be finite, but their lengths are not mandated!

So why did you accept help from others?

I did not solicit their help in any way. Their decisions are theirs. Why would I deny them the ability to participate and to do what their consciences apparently led them to do? It's not as if it is a dishonest debt, such as a gambling debt; if it were, then yes, I would return their money. (Though I certainly believe that in the totality of the debt, there is some dishonesty on the part of the providers.)

> Why would I deny them the ability to participate and to do what their consciences apparently led them to do?

Why didn't you have the courage to say no to them and simply die according to your principles?

Insurance as defined by The Devils Dictionary:


sverige says "... I came to the conclusion that it is not right, and that it is the moral equivalent of gambling."

Your 15 years' experience provides you with some authority; people will listen because of that. But you failed to tell _why_ you believe so.

You are right, I did not specify that, so I will try to now.

First, I don't believe in chance. That puts me pretty much out of the mainstream right there, even among christians, but so be it. I don't really want to get into a lengthy philosophical / theological debate about it, since I have found such debates to be utterly fruitless, but basically I believe that God orders our lives for our good and his glory.

Anyway, if something happens to me or if I do something that has negative consequences, that is between me and God with regard to personal consequences. Do I have faith that he will provide? Do I have faith that, even if he doesn't, it is still for my ultimate benefit? It's easy to say I do when everything is going well. It's quite another to demonstrate that I do in adverse circumstances.

So, second, to me, buying insurance is an act of unbelief. It's fine with me if the rest of the world wants to do it, but I cannot, since it would be a clear demonstration of my lack of faith that God will provide, even if that provision is what the world calls catastrophic. (Perhaps a little catastrophe is just what I need to make me pay attention to something I've been neglecting! This is not a popular view, obviously.)

Here's an article that explains it better than I have here, but I will say ahead of time that it will be unlikely to make sense if you do not believe in God.

"[It should be a serious question with a child of God, ere he avails himself of an assurance company, whether in the matter of fire or life, "Am I, hereby, distrusting God? or, am I seeking by human agency to counteract divine visitations? There is something sadly anomalous in a Christian's insuring his life. He professes to be dead, and that Christ is his life: why then talk of insuring his life? But many will say, "We cannot bring Christianity into such things." I ask, Where are we to leave it? Is Christianity a convenient sort of garment, which we put on on Lord's day, and at the close of that day take it off, fold it carefully up, and lay it on the shelf till the following Lord's day? It is too often thus. People have two characters; and what is this but the leaven of the Pharisees, which is hypocrisy? Insurance offices are all very well for the men of this world, who should certainly avail themselves of them, inasmuch as everything around and within is so uncertain, but to the child of God, all is sure. God has insured his life for ever; and, hence, he should regard insurance offices as so many depots of unbelief.] These things do very well for men who are only governed by now; but the disciple of Christ is to be governed by then. This makes all the difference; and truly it is a serious difference."

(From http://www.stempublishing.com/authors/mackintosh/Bk2/TIMETER... )

A comment from the same author on practice:


Here is a different perspective, that is still consistent with belief in God: http://epistle.us/inspiration/godwillsaveme.html

It suggests that you can simultaneously believe that God will provide/save/whatever and still take material opportunities presented to you.

(I don't have the same belief system as you, and I do not seek to change your view. Just sharing a different perspective that I remember hearing many years ago.)

I'm thinking why it does have a moral component in either case. I think it might have to do with the nature of a financial transaction: it does not the change the world on its own, it is not a solution to any problem.

Suppose there is a low frequency event such as a comet heading for earth; the right thing to do is build a shield or way to reflect it. Suppose there is a flood once in 500 years; the right thing to do is to build dikes.

Money is a virtual thing, we sometimes forget.

Technology and innovation can oftentimes be the alternative for insurance.

I completely agree that taking some reasonable action is one way to reduce the perceived need for insurance. For example, the recent California floods affected populated areas that were never inhabited by the indigenous peoples. Why? They knew from experience that it would flood someday -- maybe not in their lifetime, or even their grandchildrens' lifetimes, but someday. So they didn't build there.

Upon close examination it's quite apparent that Mutual Insurance Companies are the best method to address risk without moral issues, I think, whereas most of the for-profit industry is so ridiculously in bed with regulators it's awash in essentially government-approved profit margins with any decent level of underwriting discipline. Quite fascinating. I support having coverage for things like Health and Property but what a bizarre setup we have in the US.

If someone freely chooses to gamble/take out insurance, is that morally problematic? I'm guessing you're opposed to the compulsion rather than the actual gambling?

Yes, that is correct. A person should not be compelled to participate.

What kind of insurance? I've worked in property and casualty insurance for 10 years, and although I wasn't entirely sold on some of their practices, on the whole I do think they provided an important and needed service - with way too many intermediaries and government meddling and some questionable cases where coverage is denied or accepted, but on the whole a decent service which helped make whole people that suffer catastrophic losses (cars or houses).

OTOH, the kind of insurance I think is extremely shady is the U.S. health insurance industry.

Can you explain why it's morally wrong in the case you bring up, small costs for catastrophic loss?

Because the viability of the industry is predicated on the vast majority of consumers losing money on their premiums. Insurance isn't a bad idea intrinsically, but it's a bad thing when the industry is turning billions of dollars worth of profits

Specifically, people are being persuaded to outsource risk at a steep premium rather than much more cheaply self-insuring themselves by laying aside less money regularly, or by accepting much higher deductibles. In order to increase sales, unnecessary products proliferate.

And the risks are exaggerated to induce as much fear of loss as possible. The entire industry is built on fear of loss.

Yes it's odd - even re relatively small losses. It's almost as though we're buying excess predictability, not being emotionally disturbed by losses we can absorb more easily than the premiums, often; but we aren't emotional about paying them.

Above should read: "preferring not to be emotionally disturbed"

Insurance companies generally pay out more in benefits than they collect in premiums.

I'm deeply skeptical of that given the huge profits posted by insurance companies.

There's 2 parts to this: the actual 'pay out claims' part which is the expense ratio, and then the part where the insurance company makes money off of the giant pile of cash they're holding before re-paying it to claims. I am not well-aware of ratio regulations (some amount per-state do exist) and generally their investments are quite conservative.

My source is having done investment in and diligence on a couple insurance companies (which I've since sold.)

You make a very good point, it had completely slipped past me that they can make investments with that big stack of cash they're collecting from customers.

What was your role in the industry and how did you come to your current view?

I worked for ten years as a litigation paralegal defending insureds, and sometimes insurance companies. I sold insurance for two years. I was a manager for a year in the service department of a very large insurance company whose name you would immediately recognize. I worked as a financial analyst for that same insurance company for two years.

All of these various experiences made me realize that a) American justice is really solely about the transfer of money from one party to the other, and is rarely equitable (sometimes one way, sometimes the other); and b) the entire industry is really a way for a small group to direct the investments of and reap the profits from the small capital excesses of millions of people.

> and have paid the tax penalty for foregoing Obamacare

Gambling with your health...

Actually, most of the gambling that goes on is believing you can eat what you like and do what you like without consequence, since if your body gives out, some doctor will fix it. Everyone dies, after all, so the gamble is not whether you will die, but rather what the quality and length of your life will be. But those risks are far more complex than whether you will be able to afford vastly overpriced health care in the event of some health crisis.

Upvoted for strong morals.

Or at least the willingness to live out what I believe to the best of my ability. Such behavior is often labeled as insanity by those closest to you, incidentally.

Money doesn't have a linear utility function. The more money you have, the less the next $X are worth.

This means, even for "0 sum" games where there isn't a house taking a cut, gambling will typically have an average net utility loss. You make as much money as you lose, but that's money worth more when you lose it then when you make it (past the first $epsilon).

Insurance on the other hand will typically have a net utility gain despite being a net dollar loss. When you "win", you would otherwise have very little money, so the money is worth a lot of utility. When you lose, you have lots of money so it only costs you a small amount of utility.

The answer to the headline question is in the book "how to lose a million dollars", which I recommend.

The author describes four classes of financial risk-taking 1. Investing 2. Speculating 3. Market making (I think) 4. Gambling

Investing is risking capital with a strong probability of maintaining the principle while receiving a reasonable return.

Gambling is when you have a negative-sum chance at keeping your principle.

As a result, one person with limited information and portfolio diversity could "gamble" on apple stock while another person with more diversity is "investing."

Fundamentally, they're more about information and risk than anything else.

I honestly don't understand why insurance is seen as a private affair. Everyone who is not very wealthy requires risk management, because otherwise they run a constant, non trivial risk of complete personal ruin (not just financial ruin, but inability to pay for medical care). Humans are not capable of correctly computing the acceptability of small amounts of risk of ruin. The straightforward solution is to pool risk so that everyone pays a fraction of each catastrophe, which should just be a federal tax.

At a minimum, if you have children, lack of insurance should not be an option.

Then again, I'm also in favor of decreasing U.S. freeway/highway speed lilims and enforcing them strictly (like Japan) for risk reduction reasons... I suspect that my antipathy to American libertarian machismo is far from universal ;)

Your throwaway comment about freeway speeds is a bit odd, since there are verifiable instances that show that absolute speed is not the deciding factor in road fatalities.

The most famous example, of course, is the German Autobahn:

"The autobahn fatality rate of 1.6 deaths per billion-travel-kilometers compared favorably with the 4.6 rate on urban streets and 6.5 rate on rural roads."


Most of the German Autobahn system has a speed limit and you have an recommended speed of 130.

Also your link says:

> In 2012, the leading cause of autobahn accidents was "excessive speed (for conditions)"

Yes, I know it says that.

It's a useless "fact". What highway in any place in the world would have something other than excessive speed (for conditions) as the leading cause of accidents? The only thing I can think of is landslides/avalanches in very mountainous regions, and even then I'm sure there are more than enough accidents/fatalities due to taking a corner faster than you should.

I also stated that "absolute speed is not the deciding factor in road fatalities". Absolute speed is different from excessive speed for given conditions. Going 60km/hr on an unplowed, snowy, black-ice ridden road can easily be more dangerous than going 160km/hr on a dry surface with clear conditions.

It's a private affair because it's a great racket. Collect money from everyone for doing nothing, then try hard not to pay when people need it. There's a reason that many insurance companies have been around for many decades and are in the Fortune 500. Look up who underwrites your policies and you'll see what I mean.

Like many industries, it's a great jobs program for those who would be unable to do anything else (think middle aged insurance peddlers with no technical skills and poor enough health to be unable to do manual labor jobs).

The entire car insurance industry, for example, could easily function with a fraction of its current workforce. We have the statistics on car crashes, we have the statistics on driver demographics. All that's required is to aggregate the data and target some number to achieve, say, 3% economic profit.

You could eliminate the jobs of many risk analysts and sales and have the entire industry function without the overhead of having to pay 90% of useless workforce.

Is it a cruel way to look at it? Absolutely. Killing jobs is political suicide. But could it be done? The risks are known.


The purpose of this system is not profits, but to uphold the principle of "bear ye one another's burden". The principles of takaful are as follows:

- Policyholders cooperate among themselves for their common good. - Policyholders contributions are considered as donations to the fund (pool) - Every policyholder pays his subscription to help those who need assistance. - Losses are divided and liabilities spread according to the community pooling system. - Uncertainty is eliminated concerning subscription and compensation. - It does not derive advantage at the cost of others. ...

And yet the insurance companies are for-profit corporations. Does not compute.

Gambling is an adversarial relationship. Insurance is co-operative.

When I insure my house against fire neither I nor the insurance agent want my house to burn down.

When I gamble on Man Utd to win 2-0 with Pogba to score the bookie doesn't want that to happen and I do.

Anything that is co-operative is insurance, anything that is adversarial is gambling.

Just as a side note; A bookmaker isn't actually your adversary in the way you mean it here.

A bookmaker (as defined) in a normal? environment shouldn't care for a particular result in a gamble. All they care for is the profit they make from squeezing the odds on both ends of a gamble. See https://en.wikipedia.org/wiki/Mathematics_of_bookmaking

I went for a relatively specialised market in the scorecast for my example as the bookmaker won't have a balanced booked as there are just too many options to cover.

It's cooperative before an event happens, then adversarial while deciding whether an event is covered by the policy. Nobody wants a house to blow down in a hurricane, but they don't necessarily agree on the value of the property or how much of the damage was caused in which ways (wind, water, acts of God, etc.).

You can look at gambling and insurance from a portfolio theory perspective. You want to hold the portfolio that maximizes return for the level of risk (variability) you're willing to take.

Both insurance and gambling lower your returns, but the change in variability for insurance has a -1 correlation with a risk you currently have (canceling it out), therefore significantly reducing the overall variability of your portfolio.

Gambling isn't related to any other risk you already have, therefore introducing more variability into your portfolio.

So insurance is just a form of gambling where the payout is correlated with a risk you currently carry, instead of being "random".

This raises an interesting question: is there a way to perfectly insure yourself? Or rather, a company that you pay to insure you for everything?

My understanding of insurance is that if there's say 1/100 chance of some event costing you 100 dollars, then you might pay $5 at some rate for some period of time to protect you in the case that the event occurs, costing you 100 bucks.

However, if you knew the odds of certain somewhat expected events in your life were, how could you capitalize on that? You could save, but generally people don't make enough for that to be worthwhile.

Insurance is useful for low-probability high-consequence events, where the payout could be many years of salary.

It's true that in aggregate, insurance buyers lose, but no specific insurance buyer lives in aggregate. Either you have that $500,000 claim, or you don't. The only way to self-insure is to have $500,000 on hand.

>if you knew the odds of certain somewhat expected events in your life were, how could you capitalize on that

If you know that something has a 50% chance of happening across 100,000 people, you write insurance policies such that you can deal with it happening about 50,000 times.

If an event has a 50% chance of happening for you, preparing by saving 25% of its cost isn't going to help much. Expected value calculations don't make sense for N=1.

(If you look at loss ratios in the insurance industry -- payouts and claim expenses over premiums collected -- it is closer to ~$1.20 in most fields, and coming down over time. Yay capitalism!)

(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.)

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.

Insurances have an inherent overhead cost for administration. Thus you should only insure things/people that loosing would be catastrophic financially for you.

> but generally people don't make enough for that to be worthwhile.

Yes you do.

But it doesn't have to be a zero sum game anyway. Both you and the insurer could be better off.

Life insurance is a dumb idea. But if you're human then sometimes dumb ideas stress you out. So to pay to lower that stress might be worthwhile.

But it's complicated. If you have a fire in your house sure it'd be nice to be insured.

But OMG you house just burned to the ground, you might have died, what if it happened at night, something way worst might have happened.

Your energy is better spent on fire proofing your house. You should never plan for events where you might die, you should reduce the risk of dying. If you really think theres a chance you house might burn down, perhaps you should move houses. That is more logical but less human.

> Life insurance is a dumb idea.

Not if your beneficiaries depend on you for support that you can no longer provide if you're dead, and if you care about what happens to them.

That is correct, but disability insurance is far more important than life insurance.

If you die, your spouse can marry again, your kids will be able to work at some point and so on, there are no additional costs. If you're disabled, it becomes a massive, long-term, cost burden.

You obviously have no concept of marriage or the cost of an education for your kids. Life insurance is there to make sure your families life isn't utterly ruined. Your suggestion is to leave the spouse forced to marry someone rich fast and have the kids work at McDonalds.

Did you even read my post?

Please, compare the costs of:

* Widow(er) raising two kids


* Married couple raising two kids, while one of the adults has a severe permanent disability, requiring constant care, huge medical bills, etc.

Do you understand now why disability insurance is more important than life insurance?

I am not disagreeing with the importance of disability insurance. I am disagreeing with your proposed solution to not having life insurance.

Remarrying rich and the kids eventually getting jobs is not a plan I would be ok with.

And where exactly did I propose not having life insurance? Would you mind copying and pasting the text here?

If you have to choose between disability and life insurance, go with disability insurance. If you have enough money to pay for both, pay for a lot of disability insurance and some life insurance. Probably 10-20 times more disability than life.

Stop arguing the importance of disability insurance. You sound like a parrot. Nobody is disagreeing.

You explained your suggested alternative to life insurance. Really don't think I need to copy paste that to you. Try the parent button.

The problem is that even if you fireproof your house, your house can still burn down. It makes more sense to fireproof your house AND have homeowner's insurance. You can't lower your risk of negative events to zero, but even so, that's not the point of insurance. The point is to have a safety net should some improbable event happen. I don't care how fireproof you make your house, it could still burn down, and you don't want to be without insurance when it does.

Insurance guarantees that you pay the expected value of the cost (plus some premium and buffer), dropping variance in exchange for a fee.

Gambling does the reverse, turning a fixed amount of money in to bursty payouts in exchange for a premium, adding variance.

One is basically the opposite of the other.

You can even use roulette as an event randomizer to make your trips to Vegas more exciting. (Games with probabilistic loot are more "fun" than predictable loot.)

I spent a year back in the 2000s living as a professional gambler. I know professional poker players. I write and operate "bots" that gamble on betting exchanges automatically (effectively the sports/games version of algotrading) as my main hobby - 20+ hours/week, sometimes - and my accounts are net positive to my advantage (a feat accomplished by less than 0.5% of gamblers).

Whilst I enjoy a good old punt on a horse like many a Brit or Irish racing fan, and enjoy the odd bet on a football game or cricket match, I believe that I - and fellow gamblers I know who make a profit - do not actually gamble the way most people do.

We treat it more like insurers see the issuance of insurance. First, we'll look at data. Second, we realise money management - and liability exposure vs. income - is critical to success. We look for situations where there is an edge in our favour which we call "value". When we see an edge we can quantify, we'll exploit that using Kelly or Maximal Exponential Growth strategies.

Genuinely, I look at some sports events using techniques and strategies that would not look alien to a statistician who has trained to become an actuary. They have more data with stronger statistical significance, and their thinking may be more rigorous, but they are my inspiration: with the right numbers, you can model risk, and identify what odds you're prepared to accept and what odds you're not.

I will play in casino games for recreational fun, not for profit. Same with slots/fruit machines, lotteries, and so on. Tiny amounts of money. It is impossible to beat these beyond the medium term without some form of luck. In the long run, games with house advantage will only ever be won by the house who has the advantage.

Sport though? Something where I can do some data analysis and start finding informational arbitrage over others in the market? That's potentially investment. And so far, it's done me well.

And so the honest answer is, nothing much is different, it's just that most gamblers and most people who buy insurance are people who do so without thinking and without understanding mathematics and liability, etc.

A few of us though, a small number on Betfair or perhaps inside the sacred walls of Lloyds of London, see the World a little differently and play a game with maths at our side that few others are interested in playing.

It's pretty obvious. Gambling by its nature creates a situation where the "game" is there to induce a biological response where you're either rewarded or punished asked on your performance.

Insurance is different -- its there to pool and quantify risk. That's why we don't have people hopelessly addicted to buying car insurance. It's not there to give you a rush.

Unlike with betting though, it is seen as acceptable for insurance companies to weasel out of their obligations when paying out insurance.

I wonder if an alternative to moral and economic analysis would be empirical: Look at how gambling and insurance affect people and communities. How many lives are ruined by gambling? How many lives are ruined by insurance? There must already be known issues with both gambling and insurance, because both are heavily regulated.

Yes, I think the answer to the headline is entirely that. The reason gambling is regulated is that it's fun and tends to draw the "wrong" type of crowd. It's like asking why we regulate alcoholic drinks but still use ethanol (albeit denatured) in fuel and medicine. Just look at what they're used for.

Perhaps another reason is that gambling devastates people who don't understand it and can ill afford it, whereas anybody who loses money in the insurance industry is presumably a "qualified" investor who knows how much they can afford to bet.

I think the right/wrong is in the apparatus. Gambling is usually repetitive and involves operative conditioning, which can be addictive.

Insurance is too but to a much lesser degree. If I buy fire insurance and my house burns down, I get rewarded (as in operant conditioning). But only punished when my house lasts until I die or sell it.

There's another, more direct reason: insurance is only supposed to allow you to 'hedge out' risks that you already have, whereas gambling or speculation is unrestricted.

In the case where your house burns down, you're 'rewarded' in the insurance contract, but you should be close to net indifferent (after insurance) over whether your house burned down or not.

That's why we don't let people buy insurance on other people's houses -- it creates a perverse incentive for the insurance purchaser to force a certain outcome.

Insurance doesn't ever really "reward", it just makes whole.

My opinion is that insurance is vastly misunderstood, just as gambling is vastly misunderstood. In insurance, it's the low premiums on high valued assets that obscure peoples thinking and in gambling it's often small wagers offered in return for potentially large payoffs. I know of people who could afford to replace a phone if it was stolen, but still take insurance on it because the small premium on the insurance seems like a good deal. There is just no way that these type of insurance contracts have a positive expected value to the individual. However, if you're a single Mom making ends meet, who needs to drop her kids at school every morning, please insure your car. The utility of losing the car and not being able to get to work etc. is just too negative.

“Inn-sewer-ants,” repeated Rincewind. “Tha’s a funny word. Wossit mean?”

“Well, suppose you have a ship loaded with, say, gold bars. It might run into storms or, or be taken by pirates. You don’t want that to happen, so you take out an inn-sewer-ants-polly-sea. I work out the odds against the cargo being lost, based on weather reports and piracy records for the last twenty years, then I add a bit, then you pay me some money based on those odds—“

Color of Magic, Terry Pratchett, page 45

That's the passage I found googling. It actually goes on and compares insurance and gambling. Highly recommended book (as is almost everything by the author of course)

Insurance places don't have shiny bells and whistles encouraging you to take risks, if anything the red tape actively discourages your success in transferring risk to them.

It's hard to sell insurance based on the promise of riches, the best you could do is fear-mongering risks of not having insurance.

Add what about tontines?


They are not mentioned in the article, but they are (were) IMHO the missing link between life insurance and gambling.

Not mentioned is that life insurance began as a form of gambling during the Civil War; but the original form was the reverse of the modern idea of insurance: soldiers formed a pool and the last man alive (long after the war, presumably) would inherit it all.

Could "betting" with insurance be made as fun as gambling?

I have been dreaming for years of a casino where gambling results are tied to insured events. Risk averse people would meet people looking for risk. I am not sure it is a good idea thought.

One difficulty is the discrepancy in the probabilities of outcome. Insured events are rare and cost a lot. Gambling often cost you a little bit but sometimes you earn a lot.

Sounds like you want to start an insurance company or a VC firm.

I am not sure I want that.

When you go to a casino to gamble, your gains expectancy is negative because of the house's cut. You pay to have more risk. When you go to your insurance company, your gains expectancy is negative as well, because the insurance company is profitable. You pay to have less risk.

So people pay to have more risk, and other people pay to have less. I'd like to know if those two groups can meet.

Not really, since something bad has to happen to you for you to be a "winner".

ASAP(as simple as possible), for the first you consider to pay money expecting that you are lucky, for the letter you pay money expecting that you are unlucky.

Uh... the downside isn't inevitable?

Both have possible upsides. And both have negative expected value.

How do you figure that gambling or insurance have negative expected value?

If you multiply the gambling reward with the probability of winning, it will be less than the cost to play. This is the house edge. It's how the casino makes money.

It's the same thing with insurance. If you multiply the size of the payout with the probability of getting a payout, it will be less that your insurance premiums. It's how the insurance company makes money.


E[x] = prize*winning_probability - cost < 0

> [Why do] gambling or insurance have negative expected value[s]?

The house sets the rules and the house has to make money. Occasionally the house sets bad rules [1] [2]. Those houses go out of business, leaving a greater fraction of the surviving shops demonstrating the rule.

[1] https://www.theatlantic.com/magazine/archive/2012/04/the-man...

[2] http://www.businessinsider.com/heres-the-untold-story-of-how...

Because casinos and insurance companies are profitable, and your transaction with them is zero-sum (negative if vice or sales taxes apply).

I'm not sure this answers the question outlined in the title. Gambling is wrong because the downside isn't inevitable but insurance is okay because the downside is?

If anything I imagine gambling to be introducing risk of ruin while insurance is protecting against it.

Insurance is betting on your bad luck and gambling is betting on the bad luck of others.

Difference is in the intent.

yes it's gambling, and so is a pension.

because the world is corrupt and created after men who seemingly look to exploit and take, like their forefathers did.

What if a new born baby has condition which needs an expensive surgery, how will parents pay for it, how does that fit in your everyone dies model?

We detached this subthread from https://news.ycombinator.com/item?id=13912497 and marked it off-topic.

Not the grandparent, and slightly offtopic, but I think it is inhumane to raise children with problems that would affect their quality of life. Preferably this should be detected before birth, but if it's not possible but becomes obvious just after birth I would prefer to euthanise my baby than a life in pain.

A condition that requires surgery doesn't necessarily means a life in pain...

No, it doesn't, and obviously every situation is different and needs a different analysis. Personally, I would err towards having healthy children that do not require invasive medical procedure to survive at the expense of simply making another child.

Of course this is all theoretical as baby euthanasia is illegal.

simply making another child

Making another child is many times far from "simply"

> of simply making another child.

Let me guess, you are a man. A woman will have a different opinion.

Do you have any children?

Not yet, although I plan to have at least 6 children.

I'd be interested to know if your thoughts on this change once you do. I don't think people who haven't had children can really understand how parents feel about their own children. I know I didn't.

Did you read the person you replied to carefully?

Yes, I read it very carefully.

In a word. Math.

what do you mean? in both cases the odds are against you.

In gambling, you are concentrating risk. In insurance, you are diffusing risk.

Both rely on the expected value calculation.

If you own an object that has a 10% chance in any given year to spontaneously self-annihilate (and a 90% chance to continue existing as usual), then you would expect that its value next year will be ( 0.1 * 0 + 0.9 * v = ) 0.9 times its value right now.

Gambling is to watch it for a year. If it continues to exist, you still have it, and it is worth the same. You beat the odds. But if it vanishes, you lost everything.

Insurance is to accept the reality that you can't keep winning that game forever. You can spread the risk of loss over multiple years, while abandoning any gambling windfalls you might have enjoyed. You pay 10% of the value of the object every year to your [mathematically simplified] insurer, who agrees to pay 100% of its value in the event it is lost. In any year it still exists, you "lost" 0.1 of the value you "won" by still having it. In the year it vanishes, you lost 1.0 the value of the item itself, but got a net 0.9 of the value of the item in non-self-destructing cash, "losing" 0.1 total. From your end, you get exactly the value you expect mathematically from owning the item, year after year, with zero risk to you.

The non-simplified math is a bit more complex, but ensures that while you will always eventually lose the self-destructing object itself, you will never lose all of its value all at once. It also means your insurer is essentially investing the gains you would have otherwise realized by gambling. Once their bet is closed by disappearance of your object, they pay you off from their investment portfolio and pocket the difference or absorb the loss.

The smart play for you would be to neither gamble nor insure, sell the self-destructing asset right away, and invest the proceeds normally, in something that has a positive expected value. Eliminating the risk is always worth more than managing it.

Don't be ridiculous. Insurance companies exchange a guaranteed coverage of some risk at a calculated cost by pooling risk. Gambling is a repeated game tilted the house's favour where the players can lose big with every turn of the wheel. There is nothing guaranteed to the players other than the fact that over a long enough time frame they will certainly lose and over short times they may also lose.

It should be noted of course that gambling is generally not illegal as long as the government (read: the people) is benefiting. Whether one agrees with gambling as a tax or not is another discussion. Unregulated gambling is typically illegal because it benefits no one.

Sometimes dealing with HR departments is like gambling. The house always win and you loose.

With insurance you might win exactly when you need it.

> What makes gambling wrong but insurance right?

Is this serious?

In insurance, I cannot say, "I want to quintuple-down on having a car accident this year; let me pay a $5000 premium instead of $1000 for a 5X payout!"

Insurance typically covers specified perils. When they occur, the payout is in proportion to the actual damages, not to the rarity of the odds.

If insurance were like gambling: "Oh man, I won the insurance jackpot! My house was leveled by a rare meteor---500:1 payout---not just your everyday 4:1 fire."

Also, there is the obvious general observation: insurance compensates for losses. You don't win; you lose stuff and are compensated. You don't get compensated unless you lose first. People don't always feel adequately compensated by money. Money won't bring back the memorabilia you lost that got burned up in the fire. It won't grow back a severed arm, or replace people who died.

In gambling you don't lose anything to win; just your time and the bets, which loosely correspond to insurance premiums. The win is a pure win, not a compensation for loss.

`Nuff said.

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | DMCA | Apply to YC | Contact