My view is fairly simple. People are willing to pay more than the true fair price for insurance. Essentially it is the same as if options had wide bid/ask spreads and everyone would be willing to buy options on the ask and sell them at the bid.
My view is also simple... Namely, insurance, as you have concluded, is overpriced, in fact, simply because people are structurally risk-averse. However, reinsurance, in spite of the aggregation/correlation aspect of it, is also overpriced. So you can't expect to make money by doing both legs. You can, if you are able to avoid marking-to-mkt, make money by selling insurance.