The Society of Actuaries risk management section is publishing a collection of essays on Systemic Risk, Financial Reform, and Moving Forward from the Financial Crisis and my essay on Actuaries and Assumptions is included.
I discuss the general difference between historically-based probabilistic assumptions and economic optimization assumptions. The point being that in cases where economic optimization can rationally be chosen by an economic agent, we should factor that in to actuarial models rather than using historical usage rates.
I would be interested in comments or questions at jj@forethoughtrisk.com
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