11 lessons
How Insurance Actually Works
Insurance is a potluck: everyone brings a dish, only the unlucky eat. The premium is the price of fear, here's how it's calculated.
Life of an Insurance Claim
Between your phone call and the payout sits a process with its own language: FNOL, adjusters, reserves, subrogation.
Underwriting: How an Insurer Prices YOUR Risk
You answer eight questions and a price appears in two seconds. Behind it sits a century of claims data, a frequency-times-severity calculation, and a deliberate bet that you will cost the insurer less than you pay.
Reinsurance: the insurers' insurers
A hurricane makes landfall in Florida and, within hours, balance sheets in Zurich, Munich and Bermuda start to bleed. That is the whole point: reinsurance spreads one storm across the planet so no single insurer has to swallow it alone.
Catastrophe Bonds: Turning Hurricanes Into a Tradable Asset Class
An insurer hands a slice of its hurricane risk to a bond fund. If Florida stays calm you earn a fat coupon; if a major storm lands, your principal pays the claims and you may never see it again.
Actuarial Reserving: the Biggest Guess on the Balance Sheet
An insurer collects your premium today but pays your claim years later, sometimes after a lawsuit no one has filed yet. The single largest number on its balance sheet is a forecast of money it will owe for events that have already happened but nobody has finished counting.
Annuities: Income for Life, and the Mortality Bet Inside
Hand an insurer £100,000 and it promises to pay you a cheque every month until you die, whether that is next year or in 2060. The trick that makes this possible is that the people who die early quietly fund the people who live long.
With-Profits & Participating Policies: The Smoothing Machine
Your policy "grew 4% this year" even though the fund fell. With-profits is a machine that deliberately hides the ride, holding back gains in fat years to pay them out in lean ones, until the gap snaps shut.
InsurTech: When Underwriting Becomes an API Call
A chatbot named Maya sells you home insurance in 90 seconds; a bot named Jim pays a stolen-coat claim in three. Lemonade rebuilt the 300-year-old insurance stack as software, and the economics changed underneath it.
Health Insurance Plumbing: Networks, Prior Auth, and Adjudication
Your $1,000 hospital bill is mostly fiction. Before you owe a cent, three hidden machines decide what the visit "really" cost, whether it was even allowed, and how the leftover is split between you and the plan.
Defined Benefit vs Defined Contribution: Who Carries the Risk
Your grandparents were promised a pension. You were handed an investment account. The words changed by one syllable, but the risk moved from the company onto you.