Anthropogenic Global Warming ... how hot is it ?

[Rigby5]

Perhaps. BUT !
a) To accumulate such $buffer would require over-charging by the amount needed to accumulate the amount you have in mind.
b) As S2 observed, the insurance bidness is competitive. So if one insurer does that, and a different insurer doesn't, the latter insurer will have lower premiums, and thus a competitive advantage in the insurance market.

The idea is that when the money is not used due to claims, then the insurance company takes it as profit.
And what I am suggesting is that the insurance company then is not really providing anything, and is worthless.
Instead, the people should simply share a risk pool they agree upon how much they should all put in.
There is no point to allowing a company to take this pooled money reserve as profit.
The insurance company does not prevent the events that lead to claims, so they are essentially worthless.
It is the people making payments who provide all the money when there is a claim.

 

[sear]

"The idea is that when the money is not used due to claims, then the insurance company takes it as profit.
And what I am suggesting is that the insurance company then is not really providing anything, and is worthless." R5 #481

My experience with applied statistics suggests to me while many insurance policy holders may never have a major claim, such as - my house burned down, all that's left is a broken bidet and a tennis racket, -
for an insurer of industrial size, the month to month operation costs are fairly stable. There may be a spike higher or lower here or there, but they're probably well within 3 sigma (I'm guessing).

Is a seatbelt "worthless" unless it keeps you from hurtling through the windshield into the grill of the truck that would otherwise have killed you?
Is a spare tire "worthless" unless it's twirling on the axle?

Seems to me insurance is about contingency. Hope for the best, but prepare for the worst.

"Instead, the people should simply share a risk pool they agree upon how much they should all put in.
There is no point to allowing a company to take this pooled money reserve as profit.
The insurance company does not prevent the events that lead to claims, so they are essentially worthless.
It is the people making payments who provide all the money when there is a claim." R5

It's a government regulated industry. Perhaps you're misunderestimating the administrative costs of holding a policy, even when there's no claim.