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Comment by dx034 | Hacker News Reader

I don't really understand how she made money. She apparently still bought tickets. If they weren't delayed she refunded the ticket early. But wouldn't otherwise the insurance payout just offset the price of the ticket? Or was there a premium on top of that?

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She received about $500 per delayed flight as delay compensation. It's supposed to cover extra travel/hotel/inconvenience arising from a significantly delayed flight. Since the amount involved is fairly small, payout is pretty automated...they're not checking if you actually incurred the additional expense, or even if you showed up for the flight...

It's unclear, but it sounds like there's insurance available in China that will simply pay you money if your flight is delayed by a certain amount of time. The amount you get paid is not tied to the cost of the ticket it's simply a feature of the contract, so obviously there's a trade-off there with a profitability = Insurance Payout * Probability of Delay - Flight Cost

I mean, I'm sure such policy could be arranged elsewhere too as a custom thing, but it's basically gambling at that point. You might as well go to a bookie and place a bet that a flight will or will not be delayed(most bookies would be happy to accept such bet too).

Is this some sort of joke I'm not getting or are there actual bookies that take bets on real-world events, and if so how do they determine the odds (in sports from what I understand the odds are determined by the amount gambled on either side, but I can't imagine there is a big enough market for bets on flight delays to make that work)?

> in sports from what I understand the odds are determined by the amount gambled on either side

This is incorrect. This is what applies in a totalizator market like some racing betting agencies. They take the pool of money (eg for a win) and deduct a fixed fee before paying out to the winning bet. The "odds" there are determined by which competitor the market thinks is most likely to win.

But bookmakers actually provide odds based on their own assessments. They are taking the "other side" of the bet and can suffer losses.

And yes, there are bookmakers that will take bets on almost anything. They do it the same as any risk takers, by researching the probabilities.

People bet on political outcomes, sports outcomes, all sorts of different real world events.

> And yes, there are bookmakers that will take bets on almost anything. They do it the same as any risk takers, by researching the probabilities.

Aren't there insurance companies (eg. Lloyd's) that will do the same?

At least in the UK a lot of bookies will take "custom" bets and those can be placed on nearly anything you want - political events, financial markets, sport events.....you could place a bet that there will be a pandemic declared in 2020, and well, you would have won. Obviously the more obscure the bet, the more likely the bookie will refuse or simply offer such stupid odds that it's not worth doing - depends how much is it worth them doing research into it.

Isn't this extremely ambiguous in many cases because there are no clear definitions? For example, I could've placed a bet that there will be a pandemic in 2020, but when it actually happened, couldn't the bookie have used some arcane definition of a pandemic that the current one did not fit? Or is the definition agreed on beforehand?

They would probably say ok, it must be declared officially by the WHO. For custom bets the conditions tend to be pretty clear on when the "win" counts.

Well there's examples like this: https://www.sportsbet.com.au/betting/novelty-bets/-realdonal...

I think the difference is mostly that a bookie might give you different odds for different flights. I assume the insurance costs the same, regardless of the current likelihood that a specific flight is going to be delayed.

Depends on the insurance, delaying a flight might mean a lot - like missing events/meetings/connecting flights, etc.

Connecting flights can be a big use case if you can't get the whole itinerary from a single vendor (or if laws/regulations/terms and conditions fail to make the single vendor responsible for missed connections).

But in a perfect world you wouldn't place those bets against an insurance company but against the transport service itself (of the upstream leg). "I see your ticket price of 50 and raise another 20 against your punctuality SLA." This would create incentives and would be so much less of a hassle than alternative approaches that somehow try to factor in actual damages.

If she had 30-40 insurance policies as it says in the article, maybe she was able to get each ticket refunded 30-40 times? And then did this with each of her 20 identities.

She received payments from multiple insurance companies for the same flight.

> I don't really understand how she made money.

Well, she had some kind of inside knowledge where she knew that insurance would probably provide a payout for the flight.

I'd like to know what this inside knowledge is? What did she know that she could use to predict that a flight would probably be delayed?

> What did she know that she could use to predict that a flight would probably be delayed?

At least in the USA, information on previous flights (on time / delayed / canceled) is public. Routes are pretty fixed. Combined with weather forecasts, that is probably enough information to turn a profit.

I guess from the article she had "insider information", but I'm not sure why that would be necessary to use this scheme?

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