Emerging Topics Community: What Are the Chances We Will Lose More Than $1 Million?
In this episode Joe Alaimo interviews Joan Barret, Achilles Natsis and Tony Pistilli to discuss a new concept, total risk analysis, a technique that provides a consistent methodology for answering questions like “what are the chances we will lose more than $1 million?” or “If we lost more than $1 million, was it because we missed our projection or because of random variation?” This technique relies on predicting both the projection risk, the risk associated with assumptions and models, and the random variation risk, which is the risk associated with things you cannot control, like a claim exceeding $1 million. If you want to learn more, Joan, Natsis and Tony also wrote an in-depth article, “Calculated Risk: Driving Decisions Using the 5/50 Research”, on the subject. You can find the article here: Calculated Risk: Driving Decisions Using the 5/50 Research