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Insurance is defined as pooling of risk because many people 

Insurance
WAEC 2017

Insurance is defined as pooling of risk because many people 

  • A. with common interest make claims every year
  • B. with common risk insure with the same company
  • C. with common interest insure with reinsurance company
  • D. form common association to help themselves
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Correct Answer: Option B
Explanation

Risk pooling in insurance is a practice where the company groups large numbers of policyholders together to lower the impact of higher-risk individuals by placing them alongside lower risk ones. The company is able to offer higher risk policyholders more affordable coverage as a result.


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