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Insurance

Selección adversa

A situation in which higher-risk individuals are more likely to purchase insurance, leading to an imbalance in the risk pool and potential losses for the insurer.

Quick answer: A situation in which higher-risk individuals are more likely to purchase insurance, leading to an imbalance in the risk pool and potential losses for the insurer.

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Quick answer

A situation in which higher-risk individuals are more likely to purchase insurance, leading to an imbalance in the risk pool and potential losses for the insurer.

Why it matters

Selección adversa matters because it supports clear communication in Insurance contexts for Financial Analysts, Bankers, and Traders. It also connects to aviation training and exam language such as CFA, ACCA, and FRM.

Editorial context

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Questions and answers

Questions and answers

What is Selección adversa?

In this glossary, Selección adversa refers to: A situation in which higher-risk individuals are more likely to purchase insurance, leading to an imbalance in the risk pool and potential losses for the insurer.

How is Selección adversa used in finance?

In finance communication, this term appears in contexts such as: "La selección adversa puede generar mayores costos de siniestros si el grupo asegurado atrae en exceso a personas de alto riesgo."

Why does Selección adversa matter in finance?

Selección adversa matters because it supports clear communication in Insurance contexts for Financial Analysts, Bankers, and Traders. It also connects to aviation training and exam language such as CFA, ACCA, and FRM.

Who uses Selección adversa?

Selección adversa is mainly used by Financial Analysts, Bankers, and Traders.

What category does Selección adversa belong to?

In this glossary, Selección adversa is grouped under Insurance. Related pages in this category explain adjacent procedures, commands and operational concepts.

Where does this definition come from?

This definition is sourced from CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework and published by Protermify Finance as a static finance reference page.

Definition

A situation in which higher-risk individuals are more likely to purchase insurance, leading to an imbalance in the risk pool and potential losses for the insurer.

Operational example

Adverse selection can lead to higher claim costs if the insurance pool disproportionately attracts high-risk individuals.

Localized term

Selección adversa

Localized example

La selección adversa puede generar mayores costos de siniestros si el grupo asegurado atrae en exceso a personas de alto riesgo.

Definition language

English reference definition

Source

CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework

Category

Insurance

Exam relevance

  • CFA
  • ACCA
  • FRM

Target audience

  • Financial Analysts
  • Bankers
  • Traders

Related terms

Use the related links below to continue through connected finance terminology.

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