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

Zillow may simply have realized before anyone else that adverse selection is intractable.

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

Providing insurance at the place of employment presents an attractive way to pool risk and minimize adverse selection.

From Slate • Mar. 24, 2014