Chapter 26 ERA 5.4 Approaches to Modeling the Underwriting Cycle - Major

Characteristics of underwriting cycle

4 stage of insurance business and what drives each of them

  • First stage is the classic cycle and the next 3 shows how things stabilize and then eventually breakdown

Various theories of underwriting cycle

Approaches to modeling the cycle

  • Need: Criterion variable, predictor variable, and competitor intelligence

\(\star \star\) Styles of modeling:

  • Soft has 3 methods (Scenarios, Delphi, Formal Competitor Analysis)

  • Technical use different time series models

  • Behavioral is in between

Different impact on supply and demand under different scenarios

Capital flow (fig. 26.2) under different profitability

Interaction of the various components 26.3