None of these details really matter for an insurance company. As long as they can accurately keep their total premiums above their total payouts, they'll make a profit.
1. Paying out more is not a problem as long as the premiums are covering it.
2. As payouts start to get expensive, insurers can either raise premiums, or, should the market not tolerate that, they can restrict policy coverage instead.
3. Properly assessing the risk of their _individual_ clients (as opposed to their entire portfolio) will allow them to offer more competitive policies against other insurers. They only need to be as good at that as their competitors, no more.
1. Paying out more is not a problem as long as the premiums are covering it.
2. As payouts start to get expensive, insurers can either raise premiums, or, should the market not tolerate that, they can restrict policy coverage instead.
3. Properly assessing the risk of their _individual_ clients (as opposed to their entire portfolio) will allow them to offer more competitive policies against other insurers. They only need to be as good at that as their competitors, no more.