Capitalism 2 and Capitalism Lab Forum

I own a insurance company with lots of front offices. How do i invest in shares and bank deposits for my insurance company?

Bump.

Please see the attached screenshot - select your insurance company which is indicated in red.

Please check out this web page for more details: https://www.capitalismlab.com/banking-d ... ments-opm/

I find that insurance happens to be the most broken part of the dlc. If this is truly the way insurance is run, it's a scam to high heaven, through and through.

My insurance companies rake in more money than ALL of my companies combined, as well as my banking institutions all added together. It's actually quite pathetic how leveraged insurance agencies can lean themselves out to be. It's no wonder everyone hates insurance companies, and of course, this is only, if this reflects reality in any way.

An insurance company's profit consists of two components:

1) Underwriting profit - The underwriting profit of insurance companies have been tuned down in version 6.5.05 as well. Download link: viewtopic.php?f=10&t=7665

2) Investment Profit - Insurance companies derive most of its profit from the global stock market, which in fact only produces a modest overall annual return of 2-4%. But the power of compound interest over a few decades end up propelling them to the top of the chart in CapLab when they do not suffer the kind of profit erosion likes the consumer products companies do. In other words, it is not that the insurance companies are too profitable as 2-4% annual return from the global stock market is reasonable. It is the contrary displayed by consumer product companies whose profits are sinking that make insurance companies' profits look enviable.  

I think this has more to do with the innate characteristics of these industries rather than game design decisions or gameplay balance issues. As the game is designed to simulate these industries authentically, it inevitably brings their varying degrees of resistance to disruption to the gameplay level as well. 

If you have any suggestions about improving the gameplay while retaining the realism, please let me know and I will discuss with the dev team.

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Another thing worth noting is that the Banking and Finance DLC has a separate Difficulty setting (see the below screenshot) than the Overall Difficulty Setting you see on the first page of the New Game Settings menu.



So the banking and insurance sectors are not necessarily more profitable if their Difficulty level is set to the hardest as well.

I think the problem may be insurance companies investing too much in equities (at least the player's insurance company). Their portfolios are usually 90% fixed income, loans, and cash with a significant chunk in government bonds. Insurers are rated by rating agencies for their ability to service claims based on asset liability matching. Customers are more likely to choose an insurer with a good rating from AM Best (or whatever other rating agencies are out there). There are also risk based capital requirements imposed by most major economies that effectively require equity investments and certain other risky investments like project loans to be partly financed via the insurer's own capital (i.e., not reserves).

http://www.oecd.org/investment/Evolutio ... esting.pdf