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Farmers Insurance pulls out of Florida, affecting 100,000 homeowners (www.yahoo.com)

submitted 1 year ago by wrath0110@midwest.social to c/usa@midwest.social

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[–] Banzai51@midwest.social 0 points 1 year ago (1 children)

Larger pool, lower risk. That's one of the basics in actuary tables.

[–] scutiger@lemmy.world 5 points 1 year ago

That's now how it works. Adding a high-risk pool to a low-risk pool doesn't lower the overall risk. It averages it. Meaning the lower-risk pool has their costs increased, and the higher-risk pool has their costs decreased. Since the high-risk pool is much smaller than the low-risk pool, merging them is a negative for a larger population.