Know your correlation: An interactive game: Difference between revisions
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'''Organisation(s) / Author(s)''': John Hillier, Loughborough Univeristy, UK | '''Organisation(s) / Author(s)''': John Hillier, Loughborough Univeristy, UK | ||
'''Description''' | '''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. | 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 …. | 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''' | '''Technical considerations''': | ||
None | None | ||
'''Keywords''' | '''Keywords''': | ||
Insurance, Risk correlation, Natural hazard Dependency, Co-occurring hazards, Compound risk | Insurance, Risk correlation, Natural hazard Dependency, Co-occurring hazards, Compound risk | ||
Revision as of 09:29, 26 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