Suppose that inexperienced drivers are more likely to have an automobile accident than experienced drivers. As a result, insurance companies charge higher insurance premiums for inexperienced drivers. Suppose one insurance company decided to charge inexperienced drivers and experienced drivers the same premium based on the average risk of an accident among both groups. Using your knowledge of the problems associated with asymmetric information, explain whether you think this insurance company will be profitable. This insurance company is to be profitable because of the problem of The insurance premium based on the average risk of an accident amona both inexperienced and experienced drivers will be I than the nremium for experienced drivers alone and than the premium for inexperienced drivers alone. Therefore, drivers will not choose to be insured by this company but the average nsk of inexperienced and experienced drivers be sufficient to cover the claims of driver pool and so the company be profitable