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Merdaneth
Amarr PIE Inc.
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Posted - 2009.12.19 23:14:00 -
[1]
Lately it has become ever more common and nowadays it is a spectacle that few who visit the major commerce centers haven't seen: battleships undocking from stations and self-destructing themselves close to the undocking ports within minutes. It is a miracle that collateral damage has been minimal until now.
I fail to see how a company like Pend Insurance can make a profit on selling insurance to capsuleers that pay out more than 100% of the replacement cost of the insured vessels. I don't know why Pend Insurance keeps selling high-return insurances to very high-risk clients. I have no idea what kind of business model CEO Cloo Pend runs, I frankly I don't really care.
What I am worried about is the effects Pend Insurance's odd policies have on our universe. I think that causing battleships to frequently self-destruct near large population centers is irresponsible. I also believe Pend Insurance bears a partial responsibility for many unnecessary deaths. The phrase 'my insurance has almost run out, I'm going to suicide my ship' is often heard among capsuleers. In effect the extremly high insurance payout coupled with their limited run time and no regard for the client history causes capsuleers to take risks with their ships and crew they wouldn't normally take. How many millions of crew have found their death due to Pend Insurance seducing the ship owners with attractive insurance payouts?
I also believe Pend Insurance bears partial responsibility for creating a new breed of high-security space criminals, who gleely sacrifice their ships in the pursuit of profit. By offering their absurdly high insurance payouts even to criminals, Pend Insurance has done much to make capsuleer crime in high-sec space profitable. Their policies have forced Concord to upgrade their systems and security protocols several times after this form of criminality began to take on epidemic proportions.
As a form of protest I have since a long time refused to insure my ships, although maybe I should insure my ships in order to bring down this irresponsibly financial giant faster? I know that as a Gallente corporation Pend Insurance doesn't care much about morality and a responsibility to the society at large, but I believe this situation must not be allowed to endure.
I once believed the funds of Pend Insurance would run dry by themselves, considering the hundreds of billions they have to pay out daily to their capsuleer customers, but if today's spectacle of capsuleers self-destructing newly build ships for insurance payouts doesn't even give Pend Insurance pause, I don't know what will.
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The Illusion of Freedom | The Truth about Slavery |
Verone
Gallente Veto Corp
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Posted - 2009.12.19 23:28:00 -
[2]
I've always been of the personal opinion that if some half witted idiot capsuleer wants to destroy a perfectly good piece of hardware and a full complement of crew just to make a quick few kredits, then its his own dumbass loss.
As for Pend, they'll either wise up and hike up insurance costs, or they'll go under eventually. Their choice I guess.
>>> THE LIFE OF AN OUTLAW <<< |
Magnus Nordir
Caldari
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Posted - 2009.12.19 23:29:00 -
[3]
My guess is they're in league with CONCORD - it makes perfect sense, their passive support for high-sec crime leads to CONCORD being granted ever greater powers, which also secures more founds for the financial blackhole that is Pend Insurance. Do you really believe it's a coincidence they're the only company on the market that offers ship insurance to capsuleers? --------------------------- Only those who surrender are lost |
Grim Asse
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Posted - 2009.12.19 23:50:00 -
[4]
Pend insurance need to rethink their policy. Planetside, no sound insurance company would pay a single isk to someone wrecking his hover-car by driving into a ceowd of civilians.
Moreover, their insurance policies on more advanced spacecraft are ridiculous, so noone with a clear mind insures them.
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Nauplius
Amarr Paxton Industries Paxton Federation
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Posted - 2009.12.19 23:59:00 -
[5]
The amounts being paid out by Pend Insurance are so astonishingly large ù I've seen estimates running into the tens of trillions over a few month period ù that the firm must have an illicit source for the ISK (mere stupidity would have left the company out of money long ago). Capsuleers are an ideal destination for laundered ISK, as our finances escape most oversight by planetside legal authorities, leaving only CONCORD to buy off/swindle/cheat/whatever.
All the more reason that this cluster be Reclaimed, that we might put an end to all these financial shenanigans by the Gallente.
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Aphoxakhan
The Operation Inertia
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Posted - 2009.12.20 00:35:00 -
[6]
The answer is simple; Pend Insurance can give you all the ISK they wish because they create ISK out of nothing. The greatest power possible to have over a commercial society is the power to choose when money is made and destroyed.
ISK is an extremely valuable currency, but when did it appear? Who first thought of it? The people behind the money are the ones who send us to war, they play with us like toys and all along we're in the belief that our decisions are our own. ---------------------
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Pulivin Motic
Caldari Deep Core Mining Inc.
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Posted - 2009.12.20 04:42:00 -
[7]
The amount being lost to the criminals taking advantage of the insurance is but a drop in the bucket compared to the profits gained in Pen insurances planet side operations. It would also seem like a financial blunder to completely pull up the rates or completely drop the capsuleer market. Also consider we have had some what of a peaceful lull in amount wars in High and low security systems so payouts for loss's in battle are going to be far lower than average. Also Pen Insurance must have other investments from the amount paid out by freight ship operators, miners, and the many others not facing eminent death. So to sum up what im saying, yes pen is suffering somewhat from the recent spike in fraud but I predict once the market stables itself it will once again become unprofitable to commit fraud and no doubt once the wars start firing up again across the galaxy we will see Pen's other investments paying out and hopefully outweighing their loss's.
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XFreedomX
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Posted - 2009.12.21 07:14:00 -
[8]
I think you are mistaken. This is just seller removing supply in an attempt to increase prices.
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Valnurana
Naraka Holdings Naraka.
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Posted - 2009.12.21 09:10:00 -
[9]
Originally by: XFreedomX I think you are mistaken. This is just seller removing supply in an attempt to increase prices.
I believe both options are correct. With the low prices sellers lose their profit margins, and actually earn more by destroying the ships and take the insurance as payment. But buyers also see the potential profit in this practice. It should under normal circumstances drive prices up to the point where this practice stops yielding profit. If anything manufacturers are "lucky" to have this option, because if this were the module market production would simply decrease until the prices increased again due to lesser availability.
Out of curiosity what has made the battleship prices drop as low as they are?
~~~ CEO - Naraka Holdings Executor - Naraka. |
Atormeleon
Intaki Liberation Front
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Posted - 2009.12.24 12:24:00 -
[10]
Finally someone takes up this issue. Every time you go streaking a bit and enter a station where you haven't been before, the surveillance team of SSC and Pend hands you a new ship. They say they're just being "friendly" but as a former shuttle merchant I don't quite agree with that notation.
The fact that their business logic appears to be unsustainable to the casual eye has puzzled me a lot. It would be curious to know if the monopoly of the Pend extends to the personal insurances of the onboard staff. Because the crew members are many, one could overcome the losses from the ship accidents with a reasonable profit coming from the onboard personnel death insurances. I mean, their families would be in trouble if something happened to them. If the crew members don't prepare for this and take care of the death insurance themselves then who would? The Angels? Their employer? No way. Any crew member with a family to support is a potential client for Pend.
It would be quite profitable to make a lot of short contracts, just long enough to cover the time from the take off to redocking. Every succesful space trip would mean a lot of expiring contracts. However, if the travelling is too safe, many crew members would refuse the contract, trusting their luck. If this was the case it would make sense to be "friendly" and pay the capsuleers generous refunds for blowing up their ships.
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Dieter Guntram
Caldari
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Posted - 2009.12.24 13:10:00 -
[11]
I admit - this made me laugh a little too hard. Capitalism is a wonderful thing, and a fool's place is on the streets where I come from.
Here's to Insurance Fraud and cheeky profiteering.
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Magnus Nordir
Caldari
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Posted - 2009.12.24 13:39:00 -
[12]
How exactly does one profit from insurance fraud? Even with the recent drop in battleship prices, if you take the prices in jita, the profit from self destructing a stripped ship and buying a new one with the insurance payout amounts to the following sums:
Raven: ~200 000 ISK Rokh: ~150 000 ISK Armageddon: ~350 000 ISK Apocalypse: ~100 000 ISK Abaddon: ~50 000 ISK
Can someone enlighten me as to how this substitutes a venture any more profitable than spending a few minutes mining the most common ores in highsec belts? --------------------------- Only those who surrender are lost |
Ahura Matsuda
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Posted - 2009.12.29 20:36:00 -
[13]
Originally by: Magnus Nordir
Can someone enlighten me as to how this substitutes a venture any more profitable than spending a few minutes mining the most common ores in highsec belts?
Because some people fail at Maths, or they really really hate mining.
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Feyona
R.E.C.O.N. Talos Coalition
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Posted - 2009.12.30 09:20:00 -
[14]
Originally by: Magnus Nordir How exactly does one profit from insurance fraud? Even with the recent drop in battleship prices, if you take the prices in jita, the profit from self destructing a stripped ship and buying a new one with the insurance payout amounts to the following sums:
Raven: ~200 000 ISK Rokh: ~150 000 ISK Armageddon: ~350 000 ISK Apocalypse: ~100 000 ISK Abaddon: ~50 000 ISK
Can someone enlighten me as to how this substitutes a venture any more profitable than spending a few minutes mining the most common ores in highsec belts?
What you need to look at is not just the battleship prices on the market but mineral prices. Build your own using minerals bought off the market and the difference in price becomes higher. As for Pend insuring high risk ships - it's probably a net loss, but insuring us podders can be pretty good publicity, no? I'd imagine it boosts their other business ventures enough to make it worthwhile. |
Gzalzi Tralan
Gallente Tralan Industries
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Posted - 2009.12.30 11:46:00 -
[15]
Pend Insurance needs to stop giving pay outs to obviously self-destructed ships. Any planet-side Insurance Company would not pay out to someone who destroyed their own vehicles.
Thank you for your time,
Gzalzi Tralan CEO Tralan Industries |
Alica Wildfire
Minmatar Federal Investigations Agency
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Posted - 2009.12.31 11:33:00 -
[16]
Insurance fraud is the second oldest crime since financial market and stock trade.
Guess what happens if the insurance is not paid out any more? The money normally falls back the the miners. The miners won't get money any more because less ships get actually destroyed. This means the request of ships sink. This means the miners and producers will try to underbid their competitors.
The price of ships would sink to nothing. The value of ore would sink to almost nothing.
At the moment the value of ore and minerals is kept stable by the Pend Insurance. And I admit that I am myself taking part in this great economic balance. If I see ships for sale for under the insurance price, I buy them and resell them for the correct sum. For some things this is no option. And ships have to be destroyed.
The consequence would be financial chaos. The destruction of overproduction is something that is a pity for the fine products that go down the river, but it is a sacrifice that has to be made to stabilise the market.
But the effect of insurance on the market prices is indeed interesting. And I won't blame those who serve the mechanism for the folly of it. There are some corporations and organisations that actually make money. Pend Insurance but CONCORD itself is making money for the bounties they pay. The money that is paid by other corporations for missions they request is indeed not much compared to the material these missions produce and feed to the market.
There has always to be a balance between ware and money. Each ware has to be countered with it's value in money. If more ware than money is available this leads to deflation and people sum up money. If more money than ware is available this leads to inflation and a run on wares.
With mining corporations actually sucking up most hisec belts during a day they produce a lot of ware. And no money is produced at the same time to compensate this. The bit money for missions or bounties is not that high. Thousands of POSes out there are producing stuff without money too.
So. Where does the money come from? It comes from Pend Insurance. Normally it is fed to the market by war and losing ships. But in times like this where there is a clear overproduction and underdestruction the prices are falling. And Pend Insurance catches them for stabilisation. In a few months this might change and nobody is talking about this effect anymore. -- FREEDOM, PUNK & AUTOCANNONS
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Atormeleon
Intaki Liberation Front
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Posted - 2010.01.02 07:08:00 -
[17]
Originally by: Alica Wildfire Guess what happens if the insurance is not paid out any more? The money normally falls back the the miners. The miners won't get money any more because less ships get actually destroyed. This means the request of ships sink. This means the miners and producers will try to underbid their competitors.
I believe this is what Mr. Merdaneth was saying in the original post. If the Pend insurance wasn't subsidizing ship accidents, less people would get killed.
Originally by: Alica Wildfire
The price of ships would sink to nothing. The value of ore would sink to almost nothing.
At the moment the value of ore and minerals is kept stable by the Pend Insurance. And I admit that I am myself taking part in this great economic balance. If I see ships for sale for under the insurance price, I buy them and resell them for the correct sum. For some things this is no option. And ships have to be destroyed.
When the ship prices sink, people will be more eager to buy them, right? If Pend wasn't conducting its shady business, the markets would find a new equilibrium where people could afford the vehicle they want and where the traffic corridors would be safer.
Originally by: Alica Wildfire
The consequence would be financial chaos. The destruction of overproduction is something that is a pity for the fine products that go down the river, but it is a sacrifice that has to be made to stabilise the market.
For some people an era of peace and prosperity would be a financial chaos.
Originally by: Alica Wildfire
But the effect of insurance on the market prices is indeed interesting. And I won't blame those who serve the mechanism for the folly of it. There are some corporations and organisations that actually make money. Pend Insurance but CONCORD itself is making money for the bounties they pay. The money that is paid by other corporations for missions they request is indeed not much compared to the material these missions produce and feed to the market.
How do you know that Pend makes money?
Originally by: Alica Wildfire
There has always to be a balance between ware and money. Each ware has to be countered with it's value in money. If more ware than money is available this leads to deflation and people sum up money. If more money than ware is available this leads to inflation and a run on wares.
With mining corporations actually sucking up most hisec belts during a day they produce a lot of ware. And no money is produced at the same time to compensate this. The bit money for missions or bounties is not that high. Thousands of POSes out there are producing stuff without money too.
Many people don't believe in market economy, they are worried that the balance doesn't last without regulations. And that is true, first there would be a short period of adjustment and after that the inflation and other side effects would vanish. The markets would return to their natural state, where people exchange goods for their mutual benefit and the prices would reflect the supply and demand.
Originally by: Alica Wildfire
So. Where does the money come from? It comes from Pend Insurance. Normally it is fed to the market by war and losing ships. But in times like this where there is a clear overproduction and underdestruction the prices are falling. And Pend Insurance catches them for stabilisation. In a few months this might change and nobody is talking about this effect anymore.
People will never stop dreaming about a market which is free or forgetting their hopes for a world which is peaceful.
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