What is the definition of Antiselection?

Antiselection refers to the tendency of people who need insurance to buy insurance. Meaning, those who are likely to make claims are the ones that seek to be insured. This includes people who live dangerous lifestyles (motor cross bikers, scuba divers) and those who have dangerous jobs (racecar drivers).

Those who fall under antiselection also have the tendency to falsify their insurance declarations or conceal relevant information that would otherwise prevent the insurance company from accepting their application.

To prevent antiselection from happening, insurance companies can raise the premiums or limit coverage for a specified group of people. Antiselection will have an adverse effect on profitability, since insurance works at its best when risk is spread to a large group of people and to an extended period of time.

• Competitive State Fund
• Excess and Surplus Lines
• Commission
• Businessowners Policy / BOP
• Employer’s Liability