A lack of information about the riskiness of potential customers forces insurance companies to sell insurance on the assumption that they will face the average number of accidents for the population.

Question

Quizplus · Accepted Answer

Insurance companies often use statistical data and assumptions to determine risk and pricing, but a lack of information about individual customers can lead to selling insurance based on the average risk for the population.

A Lack of Information About the Riskiness of Potential Customers