I spent over a year developing a Management Information System for a large insurance company based in East Anglia. I worked with the actuaries on the business processes of matching payment schedules to claim rates, and we created systems to allow dynamic exploration of the data to accurately identify the profitable and worthless market segments.
But from Marginal Revolution this week: some people buy insurance because they think it will prevent the bad thing from happening?
It was actually a reference to an excellent article in the NY Times by John Tierney: We may not slaughter animals anymore to ward off a plague, but we think buying health insurance will keep us from getting sick. Our brains may understand meteorology, but in our guts we still think that not carrying an umbrella will make it rain.
And one professor of psychology claims in the same article that "rationalists were just as likely as superstitious people to believe that insurance would ward off accidents".
Obviously I don't buy it.