Insurance is one of the oldest practices of human societies, practiced even before the first coins were minted. Chinese and Babylonian traders in the second and third millennia BC used very crude methods to protect their cargo against sunken ships and theft. Since then, the insurance industry has come a long way, but until recently, some of the fundamental challenges remained the same. Insurers had to rely on historical data and customer reports to calculate risks and determine prices, which are not very accurate methods. As a result, good customers pay more and careless customers less than they should, claims…
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