Exam DISC-RM Practice Question 263
Study guide: Exam DISC-RM
Investment yields are high, and an insurer accepts combined ratios above 100% because investment income on its reserves more than covers the underwriting loss. What is this practice called, and what does it tend to do to the underwriting cycle?
- A) Risk-based pricing, which shortens the hard phase
- B) Cash flow underwriting, which prolongs a soft market
- C) Surplus relief, which hardens the market sooner
- D) Underwriting discipline, which ends the soft phase
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