Format Online paper / PDF
Location PART 3 - THE THIRD AXIS CHAPTER 12: DARK INFORMATION Uncertainty Gives Rewards

"Insurance pricing turns uncertain losses into priced risk by estimating event probabilities and grouping similar risks."

The statement describes insurance as exchanging economic uncertainty for a predetermined price and says fair pricing requires estimates of event probabilities and risk classification.

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Source title Risk Classification Statement of Principles
Source authors American Academy of Actuaries
Source year 1980
Confidence high
Importance mid
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