Risk-based underwriting

New video shows how risk-based underwriting benefits all insurance customers


In a new video, Insurance Europe explains how insurers use pooling and risk-based underwriting to price insurance policies.

The video also demonstrates why potential EU rule changes that restrict the information that insurers can use to calculate risks could reduce the availability of insurance less and make it more expensive.

If insurers cannot price policies based on the risks posed by the insured, some consumers will pay too much relative to the risk they bring to the insurer and others too little. Insurers may also need to withdraw certain products, leaving people unprotected.

It is, therefore, important for all consumers that insurers are allowed to continue risk-based underwriting.

The video is the first in a series that Insurance Europe is producing to explain how insurance works.