Every few years, someone in the room says it. Maybe it is the new CTO. Maybe it is a consultant. Maybe it is you, staring at a model that has been accumulating complexity since before the Global Financial Crisis. The words are always roughly the same: “We should rewrite this.” The sentiment is understandable. The…
I am an actuary, not an economist, although I hold economics in high regard as a field. It tackles questions that are fascinating, ambitious, and sometimes messy in ways that make me slightly jealous. Still, I remain an actuary, and perhaps that makes me a little more sceptical of certain techniques. Maybe it is because…
As parametric insurance gains traction, insurers face specific challenges in capital modeling and regulatory capital navigation. I have a longer paper coming out on this, but if you’re looking for an intro, here are some of the interesting and different aspects compared to more traditional insurance. 1. Regulatory Uncertainty: The treatment of parametric insurance under…
Navigating Complexity in Queue Management: Slightly serious insights from the Motor Vehicle Licence Renewal Office Queue management at the motor vehicle licence renewal office offers a window into a realm of complexity that extends far beyond the waiting room. Exploring priority queuing and weighted fair queuing (WFQ), we uncover a world of probabilistic models, dynamic…
I’m listening to a legal “true crime” podcast. Guilty-as-anything defendant keeps complaining about this error, this oversight, this unfair ruling. But the thing is, none of those things really mattered. They didn’t materially contribute to the guilty verdict. The judge can say, when refusing an appeal, that those are “harmless errors” in that they did…
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…
There is a Mauritian insurer called Island Life. Best name ever for an insurance company. I firmly believe in anthropogenic climate change. I am not an expert, but my reading has convinced me of the seriousness of the issues, the overwhelming evidence that it is humans at fault. Having young children makes me seriously concerned…
I had a discussion with a client recently about the virtues of ensuring data written into a data warehouse is rock solid and understood and well defined. My training and experience has given me high confidence that this is the right way forward for typical actuarial data. Here I’m talking in force policy data files,…
