The End of Risk Pooling

John Robb:

Another sign that we are increasingly on our own. The insurance industry is rapidly (and inexorably) eliminating the idea of risk pooling:

As insurers use the new techniques to get ever-more-refined estimates of what individual policyholders are likely to cost in the future, they may be tempted to charge people closer and closer to full freight for treating an illness or rebuilding a fire-damaged home. Then even those who benefited from the end of cross-subsidies could see their rates go up as they effectively are asked to pay their own way, rather than share the cost by pooling with others.

The Economist has more.