heraldtribune.com popular Mar 14, 10 10:55 pm — Homeowners insurers primary profit comes not from insuring homes but from diverting premiums.
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Mar 16, 10 12:20 pm
Reply to raz-00:
In the case of Florida, the hedging money is spent on side companies owned by the same people who collect the premiums. Once they palm the money off to another company that they also own, none of the regulations that govern this kind of insurance apply. As a result, a lot of the fees that insurance companies pay to themselves end up in their own pockets as inflated profits.
And this is an industry that thinks it is over regulated! 
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raz-00
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Also, how the hell do you think insurers work. They invest premiums, usually pretty conservatively, and in general hope their hedging and the odds play in their favor. When it doesn't, THEIR insurance kicks in. That's why there is a reinsurance industry.