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

In an odd twist, the administration notes in the proposed rule that the ACA has provisions that could protect the marketplace from that type of adverse selection, which can drive up prices.

From Salon • Nov. 1, 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

It is an extremely complex policy matter, and Mr. McConnell has often reveled more in tactics and procedure than the arcana of community rating and adverse selection.

From New York Times • Jul. 7, 2017