[Spectarofdeath]

I believe you forgot a few steps in between 3-4.

1 - Customers give money to insurance company
2 - Insurance company invests money
3 - Insurance company pays dividends to investors (stock owners)
3a - Major disaster occurs that insurance is supposed to cover, insurance company figures out a way (aka makes up some bs)to deny all claims relating to said disaster.
3b - Issue goes to court and insurance company places a few well placed bribes to win the day and changes all policies to reflect new changes.
3c - Insurance company raises all premiums on ALL policies due to "Extreme court costs and costs of having to pay for all those victims of the recent disaster."
4 - Insurance company never gives money back to customers