The phenomenon of selecting an insurer that charges lower rates for a specific risk exposure is known as:

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Adverse selection occurs when one party in a transaction has more information than the other, typically in insurance or finance, leading to a selection process that favors the party with more information. In this context, it refers to individuals who are at higher risk being more likely to select an insurer that charges lower rates for their specific risk exposure, potentially leading to imbalances and increased costs for the insurer.

The Phenomenon of Selecting an Insurer That Charges Lower Rates