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
Correct answer is B
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.
