[cossatot]

No, because the amount of money you have in a bank account accumulates linearly, so you can only pay up to what you have put in. With insurance, you can get a payout more than what you have contributed up to that point, which is necessary for covering catastrophic damages.

[StackRanker3000]

But in this hypothetical the insurance company has perfect information, so they won’t sell you that policy that has to be paid out for more than you’ve contributed.

It’s just a thought experiment, but the more information they have on us, the more relevant it becomes.

[ses1984]

They can’t predict the future, they can’t predict exactly when you’ll get in an accident.

Perfect information means they know your risk level to the best possible accuracy, which would really only apply to populations.

Perfect information means they insure 1000 people and predict they’ll have one bad accident per year. After ten years they covered for ten accidents. All ten could have occurred in the first year and they would still be correct.

[drawkward]

With interest, the growth is superlinear