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Do you think that the price an insurance company sets for risk in advance is by definition correct? I mean, something that comes to mind in terms of current ev
by perl4ever 7y ago
Do you think that the price an insurance company sets for risk in advance is by definition correct?
I mean, something that comes to mind in terms of current events, people selling puts (stock options) just before the stuff hit the fan with COVID-19, were selling insurance. It seems really difficult in my mind to argue that that insurance was priced correctly just before the panic started.
- gwright 7y ago> Do you think that the price an insurance company sets for risk in advance is by definition correct? The question doesn't make sense. The price is neither correct nor incorrect, it is just the price. It may or may not lead to financial success based on a whole host of factors but that isn't the same thing as "correct" or "incorrect".
- imtringued 7y agoThe insurance company can also just reduce the billed amount.