An insurance company that sells fairly-priced insurance policies to a large number of individuals with similar realized accident risk probabilities should expect to:

Question

Quizplus · Accepted Answer

When an insurance company sells fairly-priced insurance policies to a large number of individuals with similar realized accident risk probabilities, it is essentially spreading the risk across many policyholders. The premiums collected should, on average, cover the claims paid out, leading the company to break even, assuming efficient management and accurate risk assessment.

An Insurance Company That Sells Fairly-Priced Insurance Policies to a Large