The main difference between pricing insurance and pricing other commodities is
A) in insurance, the future loss is unknown and must be estimated,
B) in insurance, prices are strictly regulated,
C) in insurance, pricing is done scientifically,
D) all three are correct,
E) none of these are correct.

Question

Quizplus · Accepted Answer

In insurance, the cost is primarily based on estimating future losses, which is uncertain and requires statistical and actuarial analysis, distinguishing it from pricing most other commodities where costs can be more directly calculated.

The Main Difference Between Pricing Insurance and Pricing Other Commodities