> So if they're adjusting premiums such that they're net positive on every single account, does that mean they'll refund your money if you end the contract without ever having made a claim?
No, because you're paying for the peace of mind that comes with knowing that your worst-case scenario has been mitigated, on the off-chance it happens. Even if there is no disaster, you still benefited from not having to worry about it as much (knowing that the insurer would cover some portion of it).
Let's play a game: you're allowed to flip a coin ten times, and I will pay you $1 for each time it comes up heads[0]. Your expected value is $5, but you could make as much as $10 or as little as $0.
Someone else comes up to you and offers to pay you a guaranteed minimum of $2 at the end of the game. In exchange, you have to pay him $.25 every time you flip the coin, regardless of whether it comes up heads or tails.
In expectation, you're going to come out behind, but this game tightens the variance on your outcome. The worst case is that you lose $.50 (you pay the insurer ten quarters, flip ten tails, and receive $2 from the insurer). The best case is that you receive $7.50 (you pay the insurer ten quarters, flip ten heads, and receive $10 from me). The expected outcome is lower, but the range of possible outcomes is $8, not $10.
In the real world, you're insuring against money being taken from you, but mathematically it's the same, and I find it's easier to explain it this way. Most people have a more intuitive sense of earning money than losing it. Go figure - psychology is weird.
[0] One notable difference here is that the distribution of coin flips is approximately normal (binomial), whereas most insured events have a very long tail, with a mode of 0.