(e.g. automation, cutting jobs/hours).

I would think the lack of incentive for stores to prosecute would have more to do with wanting to avoid legal costs from an associate wrongfully detaining someone or other claims, than from it being covered by insurance that they will ultimately pay back in higher premiums. As well as an unwillingness by prosecutors to actually try the cases. Which only leads to stories like we're seeing here. And ultimately to some stores closing when the loss prevention costs get to an untenable level.