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Why are insurance company profits so high?

The same reason pharmeceutical and medical supply companies, and the oil tycoons, and many other major corporations are. Every year, they have to stand before congress and answer for their business practice. Every year, congress asks them why they are making so much money while americans are suffering, and every year they reply with the equivalent of "so what". Hell, they made Microsoft break down even, saying he had a monopoly well wtf do you call it when insurance laws are so broad and vague that they can manipulate different situations to make it look like you are paying for something when you really arent, and this is assuming you could afford to pay at all. Or how about all 5 oil companies raise their prices at the exact same time for bs reasons? what do you call it when all 5 major cell phone companies screw you in the same ways. Same for car insurance, which has been mandatory forever, and if I pay 200 dollars a month for 3 years, then have a wreck that only costs a grand, I still goatta pay 500 deductible? And our congress is the reason it gets by. Our entire government is a joke, and should be stripped and prosecuted as criminals just like people have said about bush. I don't know why ppl hate him so much, he hasn't done nearly as much damage as has been done here by congress. You should know what you are talking about before you speak. http://abcnews.go.com/Business/health-insurance-profits-worth-outrage/story?id=9036632 Hundreds of millions in dollars while people suffer, you must be one of them to try to excuse it. Ha! I'll have to look into this minimum liability coverage you speak of, as for not operating a car, that is possible in some places for some people, but not for someone who has a schedule like mine in a major metropolitan area like mine. Busses work for summer fun, not for being a man. kk...I don't believe that it is only a 3-5 pct profit margin so prove it please. and even if it is, their .5 pct profits would obviously be more than most americans could ever dream of, and were suffering, and even those who have health insurance get screwed by paying hundreds of dollars a month and then when they need it boom copays and this and that isnt covered and etc. I'm not talking just about health insurance companies, but please don't make exuses for them. Oh my God, walmart is a retail chain and you try to compare their profits with the oil and insurance industries? Wow, you will go to any level to not have to open your eyes. How about this genius, water powered cars were developed in the 30's. We put a man on the moon in the 60's. We could have been oil independant a long time ago if we wanted to. Those bastards arent hurting. I remember watching them in front of congress last time when oil prices were all crazy high and people were like wtf

Public Comments

1. one reason is ins co.'s are not nationwide, allowing for bidding wars. they are confined to state by state
2. Health insurance companies have profit margins around 3-5%. That's barely even operating a business. The earn huge profits indeed like the oil companies, but having a huge volume of sales. But in both cases the profit margin is very low compared to most other industries. Car insurance isn't mandatory. For one, you don't have to own and drive a car. Plenty of people live in city areas using public transportation or a bicycle or walking and don't even own a care. Secondly, you can buy the minimum liability insurance that is very cheap and mainly covers the damage you do to others but not your own vehicle. "Our entire government is a joke, and should be stripped and prosecuted as criminals just like people have said about bush. I don't know why ppl hate him so much, he hasn't done nearly as much damage as has been done here by congress." This part I'm in full agreement on.
3. dont know but wish i did
4. xdscxa
5. kpk is right - insurance companies only make around 3-5% 'profit'. The reason they stay in business is because they can get so MANY people under them. 3-5% profit is what most grocery stores make - it's considered a very slim margin there. Why is it considered so high for insurance? Because there are groups with a vested interest in making us think they are making scads of money. (I have no idea what the numbers for the drug companies and oil industries are - those are different animals and need to be examined separately) I still think that it would make more sense to go after ambulance chasing lawyers. If we could reduce the legal costs for doctors (not legitimate claims, but all these bogus ones) medical costs would come down for everyone . . .
6. It's the way our country works, The few at the top of the pyramid are allowed to take as much as they can from the average American. Politicians also are either involvved in a big business (Chaney -KBR) or they are being paid big bucks form lobbiests. If you want to really get ahead in America and you are the average guy, forget it, you can't do it because the establishment will not allow it. The money that average people that invest in the stock market is usally eaten up by fat cats like Madoff who gets billions. SEC was told what he was doing for years and did nothing until enough people complained that the SEC had to do something. We are peasants in a fuedal system. The government is supposed to be "BY THE PEOPLE, FOR THE PEOPLE". Do you see any of that going on? Remember that the most powerful tool that you have is your vote. Make it count every time.
7. Lets look at some facts. Most companies are for profit, lets face it, Walmart and Target are not out there just to be good neighbors and provide you and me with free stuff. So lets look at some industry profits. 1. Oil Companies - 6-10 % profit for each dollar spent. 2. Pharmaceutical companies - 10-15% for each dollar spent. 3. Walmart, K-Mart and Target about 24 -33 % on each dollar spent. 4. Wall Street Investment companies - 45-67 % on each dollar spent. My brother works in the oil field and they just put in a new deep water well at a cost of 67 Million dollars. That is before the first drop is pumped and refined. Now, if oil stays at 75 dollars per barrel, at some point they reach a break even point, unless the oil runs out, then they lose money. Anyone who thinks that we need to take from the rich or big companies and give to the non working, or poor, needs to move to Cuba or Venezuela, both socialist countries. Most companies are for profit and do make money, the amount varies depending on their return on their investment. Semper Fi
8. About a month ago, I read in Forbes that health insurance profits are meager (approximately 2.2%). Oil companies do not have much control on price since oil is a commodity sold on the mercantile exchange, just like beef, corn, etc. Microsoft got hammered for predatory business practices by giving their operating system and business software for free to schools and computer stores. The car insurance deal stinks. You crash, and you are put in a higher risk category. All you can do, is change companies.