4. Adverse Selection
Insurance companies strive to protect themselves from adverse selection, the insuring of risks that are more prone to losses than the average risk. Poorer risks tend to seek insurance or file claims to a greater extent than better risks.
To protect themselves from adverse selection, insurance companies have an option to refuse or restrict coverage for bad risks, or charge them a higher rate for insurance coverage.
5. Law of Large Numbers
The basis of insurance is sharing risk among a large pool of people with a similar exposure to loss (a homogeneous group). The law of large numbersstates that the larger the number of people with a similar exposure to loss, the more predictable actual losses will be. This law forms the basis for statistical prediction of loss upon which insurance rates are calculated.
Example:
When an insurance company issues a policy on a 35-year-old male, the company really has no way of knowing or accurately predicting when he will die. However, the Law of Large Numbers looks at a large group of similar risks – 35-year-old males of similar lifestyles and health conditions – and makes some conclusions based on statistics of past losses. This allows the insurance company to have a general idea about the predicted time of death for this type of insured and to set the premiums accordingly.
4.逆向选择 保险公司努力保护自己免受逆向选择，保证比平均风险更容易遭受损失的风险。较差的风险往往比更好的风险更大程度地寻求保险或提出索赔。为了保护自己免受逆向选择，保险公司可以选择拒绝或限制不良风险的保险范围，或者向保险公司收取更高的保险费率。
5.大数定律
保险的基础是在大量具有类似损失风险的人群中分担风险（同质群体）。大数定律表明，遭受类似损失的人数越多，实际损失就越可预测。该法律构成了计算保险费率的损失统计预测的基础。
例：当一家保险公司对一名35岁的男性发布政策时，该公司真的无法知道或准确预测他何时会死亡。然而，“大数定律”着眼于一大群相似的风险 - 具有相似生活方式和健康状况的35岁男性 - 并根据过去损失的统计数据得出一些结论。这使得保险公司可以对这类被保险人的预计死亡时间有一个大致的了解并相应地设定保险费。