Pricing Inadequacy Risk

Definition of "Pricing inadequacy risk"

One of four types of risks affecting the life insurance company as identified by the society of actuaries. This risk is associated with losses that the life insurance company may incur as the result of the premium rates charged not being sufficient to pay for the adverse changes in mortality experience, morbidity experience, inflation effects on health care claims, changes in social values and their general adverse effects on claims, etc.

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