The insurers are ultimately driven by lower benefit payments.The shipping industry has been paying claims at greatly inflated rates for decades, partly due to the federal government's belief that there would be substantially fewer claims. These contracts ensure transportation companies a steady stream of private insurance funds, but the conditions of their exchange could be considered a kind of corporate welfare. These days, insurance underwriters in the US, Canada, and Australia submit bids at the shipping rates determined by the federal government. For years or even decades, a number of ships owned by shipping companies were covered by government insurance programs; in certain cases, the cost of the insurance was subtracted from shipping profits.
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