The insurance industry relies on the concept of risk pooling to run their businesses profitably. Which statement best describes risk pooling?
Putting all of the insured people and uninsured people in one large pool so you can maximize profit
Creating a large pool of insured people, and charging enough in premiums that it will cover those who file claims while also earning the
business money
◇ Creating tiny pools of insured people so that everyone in the pool has the same risk level, which makes the claims process easier
Using a randomized bidding process to generate premiums that each individual in the pool pays when a claim is filed