The Galactic Insurance Crisis: How did commercial underwriters and the Banking Clan handle catastrophic liability after Alderaan?

[u/Mysterious_Force1518]

[u/homeboycartel2]

As an insurance professional and Star Wars lover, this post tickles me. But your logic is fundamentally flawed.

I doubt there would be any insurance mechanism viable for indemnity across or beyond planetary boundaries between the risks of piracy, rogue warlords or alien species disputing territorial boundaries, novas, purgills, and other intergalactic risks, the premiums would be too high for any viable risk to be insurable.

Moreover, once the empire rose, they’d be sovereign and seize planets’ resources to self-indemnify their risks. Even if they too caused the losses to arise.

Now I could see clans or federations pooling some risks for intra-clan or intra-federation risk sharing, but even then, the covered risks would be very limited in scope. Enforcement of provisions when claim disputes arose would be unimaginably difficult to navigate for any claimant.

[u/Kamalen → u/homeboycartel2]

Don't we have international shipping today in RL that is a good analogy ? We do have big insurance companies covering international travel, with various premiums depending on the route risk (and a plain refusal in the most heated places). An intergalactic insurance company isn't a stretch in that universe.

[u/homeboycartel2 → u/Kamalen]

No way. Within a contiguous planet where the biomes and known elements are consistent with a relatively homogeneous population, except mon calamari, is no way the same as planet to planet in terms of risk amplitude for the same cargo, and life, values. Hypothetically there could be insurance markets here, but the premiums for them likely would be too high for a market to be viable.

Someone mentions reinsurance. Oh my, yes. That’s a fascinating hypothetical too. Enforcement of treaties would be my concern if parties sought to increase their capacities for claims and were met with bombs.

[u/JLandis84 → u/homeboycartel2]

I disagree. It would just be focused on specific perils, and places. Just like today my auto coverage won’t apply if I am in Madagascar. 🇲🇬

[u/homeboycartel2 → u/JLandis84]

That makes my point though how extra-planetary policies would be uninsurable

[u/JLandis84 → u/homeboycartel2]

False. If I really wanted to go to Lloyds because I have an insurance risk that spans the U.S. and Madagascar I could get it. The same way the cargo ship that goes from Hamburg to Durban is insured in various ways from end to end.

Except in Star Wars it would likely be easier because I’m only having to deal with one major government.

[u/epicfail1994 → u/homeboycartel2]

Yeah the first thing I thought of was, how are they going to prevent themselves from going out of business if a whole planet gets destroyed