Loss Triangle Philosophy. Gary Blumsohn CARe Seminar: Cambridge, May 2008. Background. Committee on Reinsurance Research Practical questions: Actuaries mostly learn to do loss development on the job Can we give guidance to improve approaches – especially on unstable triangles?.
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Cambridge, May 2008
CV = 13%
“Actuaries must not pretend to judge what they cannot scientifically model.”
Variance, Vol. 1, Issue 2, p. 216
Know the future
Know the future statistically
Don’t know distributions
Blumsohn, PCAS 1999, p. 31
“If you cannot measure, scientifically model.”
your knowledge is meager
Your knowledge is meager and unsatisfactory,
but your boss needs an answer
Frank Knight, on the practical meaning of Kelvin’s statement for social scientists:
“If you cannot measure,