Question: a) Discuss THREE (3) different product designs that could be incorporated onto insurance products by insurers to minimise the effects of adverse selection on insurance

a) Discuss THREE (3) different product designs that could be incorporated onto insurance products by insurers to minimise the effects of adverse selection on insurance market. Provide ONE (1) example to explain how each design could effectively address adverse selection problem.

b) i) A businessman was facing huge financial problems. To resolve the situation, he torched his store to enable him to make a claim to get insurance money. Which of the requirements of an insurable risk are met and which are not met by the arson peril?

ii) How society benefits from indemnification for loss? Give ONE (1) example to support your explanation.

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