If insurance companies knew how risky their customers were:

Name: If insurance companies knew how risky their customers were:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Adverse selection occurs when there is asymmetry in information between buyers and sellers, leading to a situation where high-risk individuals are more likely to purchase insurance than low-risk individuals. If insurance companies knew exactly how risky their customers were, they could adjust premiums accordingly, eliminating the problem of adverse selection.

If Insurance Companies Knew How Risky Their Customers Were