Description: Full version of Risk Management, March 2007, Issue No. 10.

Description: We can do a better job of communicating the degree of "riskiness" that is inherent in our models of risk. The "Coefficient of Risk" is one way to present fatness of model tails in simple terms using widely understood basic concepts.

Description: In this article the author discusses creating a common language for ORSA, capital and stress.

Description: “Many commentators have suggested that firms need to do stress tests to examine their vulnerability to adverse situations that are not within the data set used to parameterize their risk models. We suggest the adop¬tion of a terminology to describe stress tests and also a meth¬odology that can be adopted by any risk model user to test and communicate a test of the stability of model results.”

Description: People naturally observe risk in the form of the range of experienced gains and losses which is usually represented in statistical terms by standard deviation. In most cases, there are not enough observed values to reliably discern the true amount of losses that are possible in extreme situations. Statistical techniques that have long been applied to insurance company risks are being used to extrapolate from observed risk to extreme tails of the distribution of gains and losses. These processes are essentially an extrapolation from the “known” risk of volatility near the mean to “unknown” risk of extreme losses. “Fat tails” is a term often applied to risks where the likely losses in rare situations significantly exceeds the predictions of a Gaussian (“thin tailed”) distribution. This paper will look at the relationship between the observed risk and the extreme risk in statistical insurance r isk models and discuss how we might create a discussion among model users about the appropriateness of that relationship for specific types of risks.

Description: Describes ways to avoid the next financial crisis by following the example of those who got it right and discerning what you could be doing to prevent your firm from experiencing excessive losses in future crises.

Description: "Management must manage. An incentive compensation formula will not be sufficient."

Description: The series finale on thinking and decision making, this article explores when actuaries should use a heuristic or systems analysis method of decision making.

Description: The 2024 Dangerous Risks survey shows respondents react to recent increases in "old favorite" risks as technology evolves and the environment moves away from the pandemic.

Description: This report provides highlights of a weekly survey of practices regarding the mitigation of the spread of COVID-19 in the U.S. during the first half of March 2021 along with comparisons to prior half-month time periods. The survey asks about the degree to which the respondents perceive that people in their community are following 21 common mitigation practices. The responses are separated by state and compared to state level statistics regarding the level of COVID-19 infections from the Johns Hopkins COVID database for the same time period.