It generally does. If accidents (and payouts) drop by 90%, revenue will ultimately drop and profits will follow. Profit margins may increase, but total profit $$ will likely drop.
Yes, this is true - but it’s still beneficial enough to have fewer claims. Claims incur cost in many ways and running a business with fewer claims would be more predictable and likely worth the minimal trade off.
It generally does. If accidents (and payouts) drop by 90%, revenue will ultimately drop and profits will follow. Profit margins may increase, but total profit $$ will likely drop.
Aren't insurance profits capped to some percentage of revenue in most jurisdictions by law?
Yes, this is true - but it’s still beneficial enough to have fewer claims. Claims incur cost in many ways and running a business with fewer claims would be more predictable and likely worth the minimal trade off.