Education And Debate

Controversies in management: Denying access would do more harm than good

BMJ 1996; 313 doi: (Published 03 August 1996) Cite this as: BMJ 1996;313:287
  1. P H Smee, head of life insurancea
  1. aAssociation of British Insurers, London EC2V 7HQ

    At one level this debate is as old as insurance itself. The principle of insurance is that individuals bring a risk that is then pooled among a large number of people who wish to make provision against the same risk. The same principle applies to life insurance; even though we all have to die, none of us knows when this will happen but some are more clearly at risk from a premature death than others. This has to be reflected in the premium. A life insurance company has to evaluate what risk each person brings to the pool as accurately as possible. Otherwise some people will have paid sums that do not reflect their risk and will be unfairly advantaged; this can be only at the expense of other policy holders.

    Insurance companies do not have a limitless pot of gold from which claims are paid. Their funds represent the money put in by policy holders, and if some do not declare information that would allow an accurate evaluation of their risk then they will profit at other customers' expense. Any …

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