Question regarding administration of insurance
What is a benefit of having a insurance administered privately vs publicly?
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What is a benefit of having a insurance administered privately vs publicly?
Comments
Do you mean a public insurance scheme that's administered by private insurers? If so, one benefit is that private insurers already have the infrastructure for underwriting and claims handling. This relieves a public entity from creating the infrastructure, even if the public entity is ultimately responsible for the losses.
If you're asking about benefits of private insurance versus public insurance in general then benefits of private insurance would be that the taxpayer is shielded and also that private insurers tend to be more innovative than public insurers because they are motivated by competition and profit. This ultimately produces a better product for the consumer.
The first was my question actually. Thanks! If that's a pro for being privately administered, what's an advantage of a public insurance creating their own infrastructure?
I don't think there is one. It would be costly and inefficient.