1 / 9

Can we insure these risks?

Fat Tails. Can we insure these risks?. Cooke and Kousky nsf # 0960865. Micro Correlations. Tail Dependence. These risks have big loss years: NFIP example. And even bigger losses can be expected . Insuring Risks is EXPENSIVE. Rates of Return on Net Worth for Homeowners Ins: US vs. Florida.

kennan
Download Presentation

Can we insure these risks?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Fat Tails Can we insure these risks? Cooke and Kousky nsf# 0960865 Micro Correlations Tail Dependence

  2. These risks have big loss years: NFIP example

  3. And even bigger losses can be expected

  4. Insuring Risks is EXPENSIVE

  5. Rates of Return on Net Worth for Homeowners Ins: US vs. Florida Measure of firm profitability Source: NAIC; 2005/6 US and FL estimates from the Insurance Information Institute.

  6. Rates of Return on Net Worth for Homeowners Ins: US vs. Florida Averages: 1990 to 2006E US HO Insurance = -0.7% FL HO Average = -38.1% 4 Hurricanes Wilma, Dennis, Katrina Andrew Source: NAIC; 2005/6 US and FL estimates from the Insurance Information Institute.

  7. MITIGATION(aka ‘get out of the way’) Thin the tails De-couple risks Reduce insurance costs

  8. Fat Tails THANKS for viewing! Cooke and Kousky nsf# 0960865 Micro Correlations Tail Dependence

More Related