A distinctive characteristic of earthquakes, hurricanes, bombings, and other insurance risks is that they impact the values of stocks, bonds, commodities, and other market-based financial products, while remaining largely unaffected by or "aloof" from the behavior of markets. Quantifying such risks given limited data is difficult yet crucial for achieving the financing objectives of insurance. Powers begins with a discussion of how risk impacts our lives, health, and possessions and proceeds to introduce the statistical techniques necessary for analyzing these uncertainties. He then considers the experience of risk from the perspectives of both policyholders and insurance companies, and compares their respective responses.

Preface

Acknowledgments

PART 1. Living with risk

1. The alpha and the omega of risk The Significance of Mortality

2. Into the unknown Modeling Uncertainty

3. The Shape of things to come probabilities and parameters

4. The Value of Experience Independence and estimation

5. It's All in your hear Bayesian decision making

PART 2. The Realm of Insurance

6. Aloofness and Quasi-Aloofness Defining Insurance Risks

7. Trustworthy Transfer; Probable Pooling Financing Insurance Risks.

8. God-Awful Guessing and Bad Behavior Solvency and Underwriting

9. The Good, the Bad, The Role of Risk Classification

10. ..And the lawyerly Liability and Government Compensation

PART 3. Scientific Challenges

11. What is Randomness? Knowable and Unknowable Complexity

12. Patterns, Real and Imagined Observation and Theory

13. False Choices and Black Boxes the Costs of Limited Data

14. Nullifying the Dull Hypothesis Conventional Versus Personalized Science

15. Games and the Mind Modeling Human Behavior

Notes

Author's Editorials and other writings

Bibliography

Index