Know your correlation: An interactive game: Difference between revisions
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Insurance, Risk correlation, Natural hazard Dependency, Co-occurring hazards, Compound risk | Insurance, Risk correlation, Natural hazard Dependency, Co-occurring hazards, Compound risk | ||
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[[Category|Multi-hazard Risk Assessment] | [[Category|Multi-hazard Risk Assessment]] | ||
Revision as of 20:47, 25 June 2024
Year of publication: 2024
Access: Open
Link: https://zenodo.org/records/12532855, https://doi.org/10.5281/zenodo.12532855
Organisation(s) / Author(s): John Hillier, Loughborough Univeristy, UK
Description Summary of activity: A dice-rolling game, simulating 6 causes of loss (i.e. possible hazards) and how dependency affects the chance of loss exceeding a threshold.
Why is the training important: In short, because diversification is the basis of all (re)insurance, and correlation (a.k.a. dependency) destroys diversification. So, it’s fundamental. If we get dependency wrong, we mis-estimate risk, mis-price risk etc ….
Technical considerations
None
Keywords
Insurance, Risk correlation, Natural hazard Dependency, Co-occurring hazards, Compound risk