How did insurance companies guarantee they would make a profit?

Question

Quizplus · Accepted Answer

Insurance companies could guarantee they would make a profit by selecting which patients and treatments they would insure. By covering only low-risk individuals and avoiding expensive treatments, insurance companies could minimize their costs while still collecting premiums. This allowed them to ensure a profit while also limiting the risk they took on. Charging high fees, covering only basic medical care, and increasing rates frequently are all other strategies insurance companies may use to increase their profits, but they are not necessarily guarantees.

How Did Insurance Companies Guarantee They Would Make a Profit