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A wider confidence interval in your models should make (re-)insurers charge higher premiums. Insurance is the business of taking your money and your volatility and/or uncertainty. Increase the uncertainty, increase the fair price of taking it.

Now, you can easily get me to believe all kinds of nasty stuff about any financial business principally operating out of Bermuda. But raising (re-)insurance premiums in the face of uncertain modelling is not prima facie evidence of alarmism.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Nov 2nd, 2010 at 09:35:48 PM EST
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Increasing trend in losses by hurricane damage, increasing premium. Increased uncertainty and confidence interval, increasing premium. And I'm sure that range has also been quantified by the industry, and it may have changed over the years. All fine.

Except that there were public claims of a significance of trend in hurricane losses, not on confidence intervals or uncertain modelling.

If people come back with arguments that the uncertainty was bigger, that's all fine - but it doesn't excuse anyone to claim something which has not been proven, and particularly when it's being done by people working in an industry that may benefit.

by Nomad on Wed Nov 3rd, 2010 at 08:49:39 AM EST
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