Gather round, young robots. Let Horse tell you a tale of numbers, of paradoxes, and of dollars.
Part 1:
It is the 27th of Oktoburr 40X3. All of the humans, having died in the great Covid/Flu Pandemic of 2525 which immediately came after World War 5, are all dead. Their corpses have littered the streets, have long since been vapourised and/or liquidated and the robots of the world have taken over and are doing quite an excellent job, thank you very much. However, the robots who although having achieved sentience, do not and have not ever understood things like morality or love, having never learned it from the deeply selfish and at times sociopathic humans. This is a tale of insurance.
The Republic of Oztraria, on the island of New Holland, has a population of 10 million robots. The robots all have many and varied jobs, and employment has been always perfectly at 100% for at least the last 1000 years. The central computer in Kanberra called "Da Gubbermint", has perfect information about every expense in every aspect of the economy, and as such is able to make perfect decisions.
In any given year, 100,000 robots require some kind of maintenance and/or repairs. Sometimes they need simple maintenance such as an oil change or belts and spring replacements, and sometimes they need major repairs due to damage and/or other serious problems. The expense of doing these repairs is carried centrally by Da Gubbermint's agency called "Da National Helth Service". As the economy is very big, DNHS is able to apportion the expense over the entire population, doing some calculations to work out everyone's insurance premium.
The price of performing maintenance on a robot, is obviously going to be very different depending on the circumstances of the robot in question and the nature of the maintenance and/or repair. For instance, Robie ROXMY works in the light box in Kingz Kross and its job is to push the button to make the Vita Kola sign flash on or off. Robie has a very low risk job and requires minimal maintance. Grant KRKTT who plays Krikket (for the nation against other countries like N-dya, Ingerand, and Seff Effrika) is in more danger of being hit with a krikket boll at 200mph. On average the price of performing maintenance on a robot, is $2000. Some robots require minimal maintenance; some work in very dangerous jobs. The DNHS employs exactly 2500 robots across the nation who are all paid $75,000 per year. There are also 10 buildings across the nation; all with standing costs of $10 million.
We can now perform some basic calculations to work out what the average insurance premium is per robot across the Republic of Oztraria
$2000 x 10,000,000 = $20,000,000,000
$75,000 x 2500 = $187,500,000
$10,000,000 x 10 = $100,000,000
The total of this is $20,287,500,000.
If you then divide this by 10 million robots, then the average insurance premium is $2,028.75 per robot. DNHS is exactly square when it comes to funding. Revenues minus Expenses equal exactly $0.
Part 2:
In the run up to the 40X5 elections, when all of the robots get to choose the policy mix for the next 5 year plan, there have been rumblings and discontentments from various robot factions. The Red Robot Party is quite frankly happy with the way things are being run and wants to argue that Republic of Oztraria is one giant shared project where every robot needs every other robot. The Blue Robot Party has always argued that each individual robot is a sentient being and is ultimately responsible for themselves. The Green Robot Party is almost exclusively concerned with the environment. The Orange Robot Party has no real policies other than keeping robots from other countries out of Republic of Oztraria. The Yellow Robot Party is headed by a robot called Big Rev Kev who is excited about virtually everything and wants to build a giant robot dinosaur. It is not normal.
Within our robot republic, there are many different kinds of robots who all have desires concerning what they would like done with DNHS should their preferred party get control of Da Gubbermint and upload its policies for the next 5 year plan.
Doris and Boris McPOP are both 80 years old and require frequent maintenance. Parts are becoming increasing harder to come by as models like McPOP, McZAP and O'ZONE, were discontinued ages ago. Their repair bills are progressively becoming more expensive. At some point, both of them will either suffer a fatal I/O error or require terminal shutdown. If the DNHS was a voluntary subscription service, then they would be the most likely to want to pay into the service because they can see the immediate benefit and are most likely to want to use the service.
Bruce BRUSS works for an EFTPOS company. Bruce makes its money by playing international arbitrage markets and trading micro shares. It thinks that because it isn't personally responsible for other robots, it shouldn't have to pay for them. It blames robots for their own troubles, regardless of circumstance and/or age. It thinks that robots like Doris and Boris McPOP should be encouraged to terminally shutdown themselves, or face involuntary terminal shutdown, to reduce costs on DNHS.
Jenny 867-5309 works for Terriffon which is a telecommunications company. It is a 2 year old robot which is well within the warranty period. It requires next to no maintenance at all. If the DNHS was a voluntary subscription service, then it would likely opt out of paying into the system as it can not see an immediate benefit.
Melba T0A5T, Kevin BINGO, Velma CLANK, and Garry WAHEY, all have jobs which do not pay very much money relative to everyone else. Melba files documents. Kevin cleans floors. Velma works in a retail shop. Garry shovels dirt. If the DNHS was a voluntary subscription service, then they would not be able to afford paying into the system.
Part 3:
As insurance is a collective risk pooling arrangement, then the most efficient position is to have all robots pay into the system and have the system pay for the maintenance and repair of all robots. If the system is a voluntary system; where 10% of the population of robots choose to opt out (robots like Jenny) and where 10% of the population of robots can not afford to pay (Melba, Kevin, Vemla, Garry et cetera), then the best risks have left the system and the robots who can not afford to pay although no longer being a burden on the system maybe have been able to subsidise some of the system through taxation.
If the system was universal but private, then at bare minimum premiums must increase by at least the inflation rate because shareholders demand reward for their investment. If the system was not universal and private, then the carrying costs of the administration of the system must invariably go up because competing companies will not share internal administration and this must lead to duplication somewhere in the system.
Then there are robots like Bruce. Bruce thinks that it is not personally responsible for other robots and that it shouldn't have to pay for them. Bruce would prefer that the DNHS was private and that it can reduce its costs as much as possible. Terminally shutting down robots, either voluntarily or involuntarily, is from a private profits perspective completely rational. Except if those robots contribute more into the system then they are paid out, then on a case by case basis if expenses exceed revenues, then carrying expected losses is not advised.
Applying all of these scenarios, then you might end up a 10% increase in relative carrying costs with a reduced population who will be paying into the system. This now results in a new average insurance premium of $2,235.94 per robot; which is paradoxically more than a 10% increase in premiums.
Of course, being a perfectly controlled economy, Da Gubbermint can implement any policy mix from any of the robot parties immediately. Da Gubbermint has perfect information about every expense in every aspect of the economy, and as such is able to make perfect decisions.
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[0%]
[17%]
[34%]
[51%]
[77%]
[84%]
[98%]
[100%]
The Blue Robot Party won the 20X5 election.
Jenny 867-5309 has no helth insurance because it chose not to carry any.
Melba T0A5T, Kevin BINGO, and Velma CLANK, have no helth insurance they could not afford to carry any.
Garry WAHEY was damaged at work and as it had no helth insurance, now lives in a state of disrepair on a street corner. It also could no longer afford to live in its home.
Boris McPOP shut down.
Doris McPOP was involuntarily shut down as it was no longer a viable insurance risk.
Bruce BRUSS is happy. Bruce BRUSS has no need to care about Jenny, Melba, Kevin, Velma, Garry. Bruce BRUSS did not care about Boris or Doris and their fates were irrelevant to it. Bruce BRUSS is not a sociopath because such things like morality or civic love, are illogical concepts to robots.
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