Question
Table 2 shows some data related to crime in different areas of England. When answering the questions that follow, assume that the rates of offences
Table 2 shows some data related to crime in different areas of England. When answering the questions that follow, assume that the rates of offences in each area in the year ending September 2019 are valid indicators of the current annual risks of these offences.
Table 2 Rates of police recorded crime for burglary and violence against the person for selected areas of England and Wales, year ending September 2019
Region | Burglary | Violence against the person |
Cleveland | 9.4 per thousand of population | 41.4 per thousand of population |
Gwent | 0.63% | 3.47% |
London | 1 in 109 of population | 1 in 41 of population |
Norfolk | 0.0038 | 0.0268 |
Briefly explain in your own words the extent to which adverse selection could be reduced if mutual insurance pricing models were adopted for contents insurance (eg in case of burglary) in these four police areas rather than individual risk-based pricing.
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