A private vehicle insurance company in New Hampshire conducts a study on risk of road incidents of their policyholders. The study was based on a similar study conducted by NAIC, the national insurance regulatory body. However, the cutoff value to identify high risk policyholders was kept at a lower level than the NAIC study. Which factor influenced the company's decision to choose a different cutoff?

Question

Quizplus · Accepted Answer

The company's decision to use a different cutoff value likely reflects a different perspective or objective in assessing risk, such as a more conservative approach to identifying high-risk policyholders.

A Private Vehicle Insurance Company in New Hampshire Conducts a Study