How good is the insurance industry today at underwriting long term climate risk? How could we know, today, where they’re pricing it wrong?
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Replying to @orbuch
i’m just about sure they basically aren’t doing it. nobody was pricing pandemic risk in feb 2020.
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In a post-facto way, I don't know how sophisticated insurer's models are; rather than doing prediction->charge more for buidling near risky areas, bad stuff happens->charge more
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Replying to @ArtirKel @DanielleFong
Yeah; is there some blog that’s written up “How Insurance Actually Works” for an audience of eg software engineers”? ...a wild
@patio11 appears?1 reply 0 retweets 2 likes -
There must be inefficiencies in there, otherwise you wouldn't see all this crop of startups doing insurance using various forms of ML (Same for loans). Insurance also seems superficially like (as banking and utilities) a very old school, slow-paced industry.
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Yeah, it seems they use historical data http://www.climateneeds.umd.edu/pdf/AllianzWWFreport.pdf … "Insurance industry findings"
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using historical data is... exactly the thing that seems worrisome
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@anishmohammed do you have pointers for insurance from your time at lloyds?
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Replying to @DanielleFong @orbuch and
have to admit my time in Lloyds was in retail banking
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