Arrogance and stubborness would be insisting on doing things that are literally impossible. This is pushing people to go beyond "computer says no" attitude.
230 karma · joined November 24, 2020
Product development is usually highly specialized as there are a lot of nuances and frictions within the insurance industry that outsiders may not fully understand. It helps also to be in the industry and have the network with insurers, reinsurers, brokers, etc. This is not at all to suggest there isn't room for clever people to bring innovation to the market though!
Book recs are hard to specify for CAT bonds but for insurance in general:
Against the Gods: The Remarkable Story of Risk - Peter L. Bernstein
The Black Swan - Nassim Nicholas Taleb
On the Brink: How a Crisis Transformed Lloyd's of London - Andrew Duguid
The last one is a personal favourite of mine
On the risk side - your comments here are part of the myth I’m trying to dispel and will have lots more to say in future posts.
Yes for a single CAT bond you are exposed to potential 100% principle losses. But if you buy a bundle of CAT bonds that focus on say California Earthquake, Florida Hurricane, Japanese Typhoon, and a Cyber Event, you can imagine the diversification benefit you get there.
I’ve already created a very very simple model for people to play around with and learn the intuition for CAT bond return patterns. A default means 100% loss and this is unique vs. other bonds. I plan in the future to build a much more robust model.
https://www.riskvest.io/data-lab/cat-bond-portfolio-simulato...
I will clarify that CAT bonds can have industry loss triggers OR actual indemnity triggers. If an indemnity trigger then the insurer has to prove the actual loss. But you’re right on ILWs (Industry Loss Warranty) in that there is additional model/basis risk considerations.
Insurance companies try to minimize this basis risk. Because while sure it’s great to be in the situation where your CAT bond recovers when you didn’t have large losses, it’s NOT good to be in the position where you had big losses and you don’t recover. Certainty of recover can affect things like how much regulatory credit you get for your reinsurance.
For the web designers here please let me know if you noticed anything amiss. Ive had particular issues getting captchas working so please comment if you run into that issue.
VS Code/Python has made some major improvements in the past couple years but it’s still very clunky compared to the ease of running R code line by line without having to start up a debug instance. And now with copilot the most frustrating parts of R (such as remembering all the Tidyverse syntax) have been abstracted away.
The past couple decades have seen huge advancements in safety, reduced workplace injuries, auto injuries, etc. all driven in some part by analytics.
This sentiment that “all data analysis = advertising = evil” seems very reductive. It reminds me of all the comments I see from my technical peers about how “useless” other departments are such as HR and Sales, when they’re fundamental to a healthy business which pays the salaries of programmers.
I don’t like throwing around out the phrase “privileged/out of touch” too often but this post doesn’t seem fit for the top position of HN.
To rephrase if this is not the case - what value does solving P = NP provide?
Show HN: A tool to quickly improve your skills
Amazing stuff.