3 ms·
> Effectively they didn’t adjust prices fast enough to the actual changes in risk, which on the whole seems like something best dealt with ex post, not ex ante.
by sangnoir 3y ago
> Effectively they didn’t adjust prices fast enough to the actual changes in risk, which on the whole seems like something best dealt with ex post, not ex ante.
If the insurers could have it their way, they wouldn't have to adjust at all (for overcharging), while avoiding undercharging ahead of time. Oversight is necessary to counter misaligned incentives.
- kristjansson 3y agoRight, this is a reasonable compromise between stability/profitability of risk-buyers and fair pricing for risk-sellers. Prices are unconstrained at transaction, but outsized profits can be clawed back. The point is no part of this is _fraud_.