What Does Postselection of Insured Mean?
Postselection of insured is a technique used by underwriters. It involves periodically examining insurance policies to determine whether they should be renewed or cancelled. This decision is based on whether or not the risk of insuring the policyholder has increased significantly.
Underwriting techniques like postseleciton of insured help insurance companies remain solvent and profitable.
Insuranceopedia Explains Postselection of Insured
Sometimes, an asset simply becomes too risky for an insurance company to continue insuring. The risk of loss becomes too high for the insurer to still reasonably expect to profit.
For example, if a landlord has property insurance for a business tenant, and that business tenant decides to start storing and selling pyrotechnic equipment, the insurance company may decide to not renew the insurance policy.