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Insurable risk is a critical concept for insurance companies. Their underwriting departments are tasked with...

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Finance

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Insurable risk is a critical concept for insurance companies. Their underwriting departments are tasked with ensuring that risk exposures will not bankrupt the firm. The characteristics of ideal insurable risks include which of the following? (1) Losses must be due to chance (2) Losses must be catastrophic (3) Risk must be speculative (4) Probability and magnitude of loss must be quantifiable (5) Access to large non-homogeneous group of insureds (6) Loss must be predictable 2, 3, 4 and 5 1, 4 and 6 1, 3, 4 and 5 1, 2 and 6 Mark discovers that he has a serious health condition, after visiting his doctor during an annual checkup. He immediately stops by a local insurance office and fills out an application for life insurance. He submits the application to the agent, along with a check for the first premium payment. This is an example of: Morale hazard O Moral hazard O Physical hazard O Fundamental risk O Adverse select

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