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They don't want "less risky customers" in car insurance and similar markets they want:

More customers (full stop, if you have customers then your competitors don't have them, so you grow and they fail) Customers who pay more money

Correctly assessing risk is not irrelevant but it's a small factor. You will not go out of business if you get the risk factors slightly wrong, you will if you can't attract customers or if they don't pay.

In markets where you insurer fewer, bigger customers you care even less about accurately computing their individual risk, and more about a problem called aggregate risk - if you ensure all the residential blocks in San Francisco against earthquake damage, the Big One wipes you out. Insure one such block in every US city and you're fine, the Big One means you take a loss in SF but not in New York or Seattle. But if they're all built from Newsteel and then it turns out Newsteel turns into mush after 25 years you're back to big problems. So you are suddenly very interested in understanding what is the Same about things you insure.




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