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 March 2019 are valid indicators of the current annual risks of these offences.

Table 2 Rates of police recorded crime for burglary and bicycle theft for selected areas of England, year ending March 2019

Region	Burglary	Bicycle Theft
North East	7.1 per thousand of population	1.4 per thousand of population
West Midlands	0.0079	0.0010
South East	0.54%	0.16%
London	1 in 109 of population	1 in 417 of population

Source: adapted from ONS (2019)

Briefly explain in your own words the meaning of moral hazard, and identify two ways in which an insurer can design a policy covering bicycle theft to reduce the risk of moral hazard.