Terrible analysis. With insurance, you have a 100% chance of losing all the premiums. With self-insurance, you have a good chance of keeping the premiums. This analysis ignores that completely. You have to discount the insurance benefit by the chance of using the benefit.
Terrible analysis. With insurance, you have a 100% chance of losing all the premiums. With self-insurance, you have a good chance of keeping the premiums. This analysis ignores that completely. You have to discount the insurance benefit by the chance of using the benefit.