Actuarial and Risk, complexity, insurance, life insurance, managing uncertainty, modelling, Solvency Assessment and Management, Solvency II, systemic risk
Downwards counterfactual analysis
Stress and scenario testing are important risk assessment tools. They also provide useful ways to prepare in advance for adverse scenarios so that management doesn’t have to create everything from first principles when something similar occurs. But trying to imagine scenarios, particularly very severe scenarios, isn’t straightforward. We don’t have many examples of very extreme…
