When Lloyd's of London offered to provide insurance to merchant ships in the eighteenth century,Lloyd's was:
A) exhibiting risk-averse behaviour.
B) less sensitive to risk than were those who requested insurance.
C) attempting to decrease its exposure to risk.
D) not very rational in its behaviour.

Question

Quizplus · Accepted Answer

Offering insurance to merchant ships shows that Lloyd's was willing to take on risk, which is the opposite of risk-averse behaviour. However, it is also possible that the merchants who requested insurance were more sensitive to risk than Lloyd's, as they were the ones directly facing potential losses from ship damage or loss. Therefore, option B is the best choice as it acknowledges both the willingness to take on risk and the possibility of being less sensitive to risk compared to the merchants.

When Lloyd's of London Offered to Provide Insurance to Merchant