The risk that insurance companies have that those individuals who will likely have the most claims...

The risk that insurance companies have that those individuals who will likely have the most claims are the most likely to seek out buying insurance is called:

subrogation

adverse selection

underwriting

perils

Solutions

Expert Solution

B. Adverse selection risk.

Adeverse selection means that the buyer who is most likely to claim will purchase the insurance policy first, generally such customers are to be charged a high premium.

Subrogation means "stepping into the shoes" of insured to receive the rightful claims of insured by the insurance company.

Underwriting risk is the risk of loss undertaken by insurance company.

perils refer to the circumstances which cause loss such as fire,flood, torpedo, typhoon etc.

jeff jeffy answered 1 year ago

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