"Cash flow underwriting" refers to:
A)a combined ratio of 100%
B)insurance companies raising the price of insurance as long as individuals are willing to pay for it
C)refusing to sell insurance to certain geographic areas because of their expected high losses
D)selling insurance at inadequate prices and offsetting the loss with investment income

Question

Quizplus · Accepted Answer

Cash flow underwriting refers to the practice of selling insurance at inadequate prices and relying on investment income to offset losses. This approach is risky and unsustainable in the long term, as investment income is volatile and cannot be relied upon to consistently make up for underpriced policies.

"Cash Flow Underwriting" Refers To