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Glite Dictionary
anti-selection

anti-selection

9.1
One side knows more about risk, causing losses for the other side, especially in insurance
  • noun
  • /ˌæn.ti.sɪˈklɛk.ʃən/
  • UK
translation icon : selección adversa
  • The insurance company raised premiums to protect themselves against the effects of anti-selection.

Examples

  • Actuaries study anti-selection risks to develop better policy terms for clients.

  • To minimize anti-selection, companies often require health screenings before issuing life insurance policies.

  • Anti-selection can lead to higher costs and instability in financial markets.

  • The concept of anti-selection is crucial in insurance.

  • Many insurers face anti-selections when assessing risk.

  • Insurers must account for anti-selection when determining policy rates to avoid financial losses.

  • Due to anti-selection, individuals with higher health risks are more likely to seek insurance coverage.

Synonyms

adverse selection
vsanti-selection
  • Specialized
1 8.1

One side in a deal knows more than the other, causing unfair deals

focuses on harm to the less informed party rather than broad inefficiency

Surface Forms

anti-selection singular
anti-selections plural

Morphology

anti-selection = selection (semi-transparent) = anti + select + ion

The word is clearly built from 'anti-' plus 'selection', but its insurance/finance sense is a specialized extension that is not fully predictable from the parts.

Etymology

Anti-selection comes from the parts anti- meaning 'against' and selection meaning 'choosing'. It describes a situation where people with better information make choices that work 'against' the other side, for example when higher-risk people buy insurance in a way that hurts the less informed insurer.