Yes that's true the average payout rate is 60% IIRC. But due to the diminishing marginal utility of money, it may make economic sense to buy insurance against risks that would ruin you.

But buying insurance for small stuff, you're just donating money to insurance companies.

The biggest scam is 'insurance' for eyeglasses. It's a fixed, predictable cost for most people. Eyeglass frames are ridiculously overpriced, the market is practically a monopoly ran by Luxottica. Insurance companies and Luxottica manage to get people to pay $600-700 for a pair of glasses (300$ for frame, $150 for lenses, x1.5 because low insurance payout rates) by hiding the cost in monthly premiums. No one would pay that much upfront.

Insurance companies making profit doesn't mean they are a bad deal. It is usually worthwhile to trade a small predictable loss for a guarantee that you won't suffer a large unexpected loss. Even if you are wealthy enough to self-insure, it can make sense to buy insurance if they profit you can make by investing that money will outweigh the cost of insurance.

The problem is that the mantra of "maximize shareholder value" often causes insurance companies to engage in practices that are immoral or even illegal. I think the insurance industry in the US is in serious need of a major regulatory overhaul. Perhaps all insurance companies should be forced to operate as nonprofits. Maybe the federal government should start using its enormous wealth of faith and credit to provide competitively-priced, no-bullshit insurance.