Describe some practical difficulties in implementing this theory of insurance.
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Describe some practical difficulties in implementing this theory of insurance.
Started by Murphy, Sep 08 2005 09:19 PM
2 replies to this topic
#2
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Posted 12 August 2008 - 06:59 PM
Not all of us have the same knowledge, we need more info as to % of defects, chance of occurences, more categories in finer details. This would help pinpoint the class probabilities, thus be better able to predict the case probability to narrow the wrong predictions.
Also by better definitions of the class categories,i.e. Blacks and lactose intolerance, Sickle Cell and other anemia, tornadoes and building material. morning versus late night tornadoes, etc, etc. The major problem is that those who pay should be in the same categories as those that would be paid. Otherwise everybody is paying for those the event will occur to, and not for themselves.
Also by better definitions of the class categories,i.e. Blacks and lactose intolerance, Sickle Cell and other anemia, tornadoes and building material. morning versus late night tornadoes, etc, etc. The major problem is that those who pay should be in the same categories as those that would be paid. Otherwise everybody is paying for those the event will occur to, and not for themselves.
#3
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Posted 15 November 2008 - 07:54 PM
Mart Grams, on Aug 12 2008, 05:59 PM, said:
Not all of us have the same knowledge, we need more info as to % of defects, chance of occurences, more categories in finer details. This would help pinpoint the class probabilities, thus be better able to predict the case probability to narrow the wrong predictions.
Also by better definitions of the class categories,i.e. Blacks and lactose intolerance, Sickle Cell and other anemia, tornadoes and building material. morning versus late night tornadoes, etc, etc. The major problem is that those who pay should be in the same categories as those that would be paid. Otherwise everybody is paying for those the event will occur to, and not for themselves.
Also by better definitions of the class categories,i.e. Blacks and lactose intolerance, Sickle Cell and other anemia, tornadoes and building material. morning versus late night tornadoes, etc, etc. The major problem is that those who pay should be in the same categories as those that would be paid. Otherwise everybody is paying for those the event will occur to, and not for themselves.
Unfortunately I can't remember what I had in mind when I wrote this question!
I think I might have also been alluding to the fact that in practice, it's hard to really get an example of something that is class probability, not case probability. E.g. it's always possible an insurance company will go bankrupt, because it failed to correctly assess the likelihood of various events. So it seems that in practice, the difference between insuring against truly insurable events, versus those that aren't truly insurable, is a matter of degree.
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