The Pooling of Risk Leads to an Overall Reduction of Risk

question 43

Multiple Choice

The pooling of risk leads to an overall reduction of risk in society because:

• A)insurers' accuracy of prediction improves as the severity of exposures increase.
• B)insureds' anxiety of risk decreases as the number of exposures increases.
• C)insureds' risk appetite reduces as the severity of exposures increases.
• D)insurers' accuracy of prediction improves as the number of exposures increases.
• E)insureds' attitude towards risk changes as the number of insurers increases.