ABOUT THE BOOK

Risk classification within the American life insurance industry has been become a controversial issue and a potentially costly problem. This book, prepared at the Wharton School of the University of Pennsylvania, analyzes the practice of risk classification in life insurance and clearly indicates its social as well as economic consequences. The authors outline the fundamentals, methodology and rationale for the classification process and examine the strengths and weaknesses of current underwriting practices. They assess the potential weakness in the life insurance industry’s approach to risk classification and present a new method of risk assessment using a multiple logistics model. This approach combines various potential risk factors that are also applicable to other types of insurance. This book is an important tool for academics studying insurance classification methods as well as for practitioners within the life insurance industry.