The Last ‘Mystery’ of the Financial Crisis

“As you know, I had difficulties explaining ‘HOW’ we got to those numbers since there is no science behind it,” confesses a high-ranking S&P analyst. “If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value,” complains another senior S&P man. “Let’s hope we are all wealthy and retired by the time this house of card[s] falters,” ruminates one more.

Rolling Stone Mobile – Politics – Politics: The Last Mystery of the Financial Crisis.

Insurance – the 7 principles that make it ‘work’

As someone with (too) many years in the insurance industry under my belt I have called ‘insurance experts’ a lot of things but never described them as this ‘simple’ explanation of the industry does…

Insurance experts are just hopeless romantics.

Large numbers are necessary in order for insurance companies to be able to calculate risk and work out the cost of providing insurance.

The bread and butter of insurance companies is statistics. Statistics is the tool that tells insurance providers what the chances are something will happen. If you have a large number of clients you can use the “law of large numbers” which states that if you have a large enough number of exposure units you can expect them to behave as the population in general does

via Insurance – The 7 Principles That Make it Work | Career, Business management, Leadership, Entrepreneurship…. Read more of this post