idea: flight insurance, where you pay a fixed amount for the assurance that you will definitely get to your destination on time. e.g if your flight gets delayed, they will pay for a ticket on the next flight from some other airline, or directly approach people on the next flight to buy a ticket off of them, or charter a private plane.
pure insurance for things you could afford to self insure is generally a scam (and the customer base of this product could probably afford to self insure) but this mostly provides value by handling the rather complicated logistics for you rather than by reducing the financial burden, and there are substantial benefits from economies of scale (e.g if you have enough customers you can maintain a fleet of private planes within a few hours of most major airports)
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?
idea: flight insurance, where you pay a fixed amount for the assurance that you will definitely get to your destination on time. e.g if your flight gets delayed, they will pay for a ticket on the next flight from some other airline, or directly approach people on the next flight to buy a ticket off of them, or charter a private plane.
pure insurance for things you could afford to self insure is generally a scam (and the customer base of this product could probably afford to self insure) but this mostly provides value by handling the rather complicated logistics for you rather than by reducing the financial burden, and there are substantial benefits from economies of scale (e.g if you have enough customers you can maintain a fleet of private planes within a few hours of most major airports)
I’d have called this not a scam because it hands off the cost of delays to someone in a better position to avert the delays.
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?