Which measure can insurance companies implement to combat the effects of moral hazard?

Offering training programs on risk management is an effective measure to combat the effects of moral hazard. Moral hazard refers to the increased risk that an insured party may take on because they are shielded from the consequences of their actions due to insurance coverage. By providing training programs focused on risk management, insurance companies can educate their clients about the importance of risk awareness and responsible behavior.

These programs can teach policyholders about the risks associated with their activities and help them understand how to minimize those risks. This knowledge empowers clients to make more informed decisions and adopt safer practices, which in turn decreases the likelihood of losses that the insurer would have to pay for. By fostering a culture of risk management, insurers not only help mitigate risk but also build trust with their clients.

In contrast, other options like reducing coverage limits or expanding service offerings do not directly address the root cause of moral hazard. Instead of teaching clients to manage their risks, they provide a more generalized response that may not effectively change behaviors. Increasing accessibility to potential clients may broaden the client base but does not necessarily impact clients' understanding or management of risk.