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Which of the following is the most important reason for why insurance is not a good solution to manage the high frequency and low severity
Which of the following is the most important reason for why insurance is not a good solution to manage the high frequency and low severity risk?
Group of answer choices
A) The Law of Large Numbers does not apply to this type of risk.
B) The insurance loading is very high and it is a cash swapping between the insurer and insured.
C) The premium will be prohibitive and very few people can afford it.
D) The gross premium on this type of risk equals the expected loss.
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