Quote:
Originally Posted by whell
D-Ray - the numbers that I posted were Net Profit numbers for all companies listed. This would be the revenue (from all sources, including interest on funds held for reserves by an insurance company) less expenses. The reserves are the "money moving around" part of an insurance company's portfolio: the cash on hand that a carrier needs to maintain to cover anticipated claims expenses. This money is kept invested as you've suggested, and does create it's own revenue stream. However, the net profit figures include this revenue, less expenses.
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Just so I understand it, the revenue will include premiums? We are dealing with a revenue stream, in and out, and the profits are a percentage of the inlet portion of the money stream. Under those circumstances, it seems to me like 3-5% of that revenue stream would represent huge dollars in profit, simply because they are dealing with huge dollar volumes. I see that as qualitatively different than a profit based on the cost in manufacturing a product, where the income would represent sales, rather than a constantly flowing stream of money. Whether you agree with the distinction or not, do you see where I'm coming from?
Regards,
D-Ray
09-29-2010, 10:23 PM
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