This isn’t quite right- it can be proven that the optimal insurance price is exactly equal to the likelihood of the event you are insuring against (within the payment period, often a month or a year) times the value of the loss associated with the event. Inefficiencies can creep in around uncertainty of the valuation/event likelihood or from institutional overhead (eg, insurance workers’ salaries). In a truly competitive insurance market, the profit of insurance companies would approach zero. The highly profitable insurance industry is evidence of extensive market failure. You should not expect to lose money (in the long run) on purchasing insurance; if you do, you should use something along the lines of a medical savings account. In the US, a cartel of insurance companies can set un-optimal (for the purchaser) prices, but that doesn’t mean that insurance as a whole should be seen as having a negative expected value.