adverse selection

American  

noun

Insurance.

1. the process of singling out potential customers who are considered higher risks than the average.

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Example Sentences

Buying annuities individually can be costly, in part because those who expect to live longer are more likely to purchase them, creating adverse selection that drives up prices.

From The Wall Street Journal • Oct. 18, 2025

While Piskorski’s research suggests that iBuying is potentially profitable, this will be true only if companies can manage this adverse selection problem.

From Washington Post • Nov. 9, 2021

This phenomenon, also known as adverse selection, could collapse the market.

From New York Times • Feb. 17, 2020

Fewer healthy people in the pool raises the claims per member — a process that economists call adverse selection.

From Salon • Nov. 19, 2018

The idea that MoviePass would be particularly attractive to the consumers who bled the most money from the company has a name: adverse selection.

From Slate • Jul. 31, 2018