A naive person (like me) might think that an insurance company would be setting itself up for a fall by doing this, one day finding that it had to pay claims it had not collected enough fees to cover.

But that’s because I’m not thinking like a capitalist. Who bears the risk that results from this kind of fraud? Not the insurers who commit the fraud and profit from the insurance, but the insured, the ones who paid for insurance:

…clients could suddenly see their coverage withdrawn because risks that had been building over years were suddenly deemed too high.

“The industry knows these policies are going to become quite vulnerable and might not keep us profitable and we will have to cut chunks off the policies, making streets or whole areas uninsurable,” said one senior risk professional from the reinsurance industry, who said she faced “pressure to fudge the numbers”.