That’s a good Coasian point. Talking out of my butt, but I think the airlines don’t carry the risk. The sale channel (airlines, Expedia, etc.) take commissions distributing an insurance product designed another company (Travel Insured International, Seven Corners) who handles product design compliance, with the actual claims being handled by another company and the insurance capital by yet another company (AIG, Berkshire Hathaway).
LLMs tell me the distributors get 30–50% commission, which tells you that it’s not a very good product for consumers.
I know less than you here, but last-minute flights are marked up because businesspeople sometimes need them and maybe TII/SC get a better price on those?
That’s a good Coasian point. Talking out of my butt, but I think the airlines don’t carry the risk. The sale channel (airlines, Expedia, etc.) take commissions distributing an insurance product designed another company (Travel Insured International, Seven Corners) who handles product design compliance, with the actual claims being handled by another company and the insurance capital by yet another company (AIG, Berkshire Hathaway).
LLMs tell me the distributors get 30–50% commission, which tells you that it’s not a very good product for consumers.
I know less than you here, but last-minute flights are marked up because businesspeople sometimes need them and maybe TII/SC get a better price on those?