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clancy purchases an old office building and wants to obtain commercial property insurance. the building is at an increased risk of fire damage because the electrical work is outdated. in a weak economy, the insurance company charges him a lower premium than usual and agrees to take the risk. this pricing strategy is called

Respuesta :

This situation uses the strategy of premium underwriting as it reduces the premium in case of risky situations as the insurer is able to take the risk due to less premium as assurance.

What is Cashflow Underwriting?


An insurer that uses cash flow underwriting is making a wager that the losses from the numerous policies it writes will take a while to materialize. A cash flow underwriting strategy seeks to produce significant investment money from the increased business brought on by lower pricing by the individuals to avoid huge amounts of premium

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