Do Insurance Companies Make Money. Most commissions are between 2% and 8% of premiums, depending on state regulations. Since insurance companies look for lower risk investments, they tend to invest primarily in bonds.
It's true that private health insurance companies pay their ceos competitive salaries and they must remain profitable in order to stay in business. An insurance broker makes money off commissions from selling insurance to individuals or businesses. To figure out what premiums should be, insurance companies employ thousands of actuaries who specialize in advanced statistics and probability.