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Preface

Published online by Cambridge University Press:  05 May 2014

Erik Bølviken
Affiliation:
Universitetet i Oslo
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Summary

The book is organized as a broad introduction to concepts, models and computational techniques in Part I and with general insurance and life insurance/financial risk in Parts II and III. The latter are largely self-contained and can probably be read on their own. Each part may be used as a basis for a university course; we do that in Oslo. Computation is more strongly emphasized than in traditional textbooks. Stochastic models are defined in the way they are simulated in the computer and examined through numerical experiments. This cuts down on the mathematics and enables students to reach ‘advanced’ models quickly. Numerical experimentation is also a way to illustrate risk concepts and to indicate the impact of assumptions that are often somewhat arbitrary. One of the aims of this book is to teach how the computer is put to work effectively.

Other issues are error in risk assessments and the use of historical data, each of which are tasks for statistics. Many of the models and distributions are presented with simple fitting procedures, and there is an entire chapter on error analysis and on the difference between risk under the underlying, real model and the one we actually use. Such error is in my opinion often treated too lightly: we should be very much aware of the distinction between the complex, random mechanisms in real life and our simplified model versions with deviating parameters. In a nebulous and ever-changing world modelling should be kept simple and limited to the essential.

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Publisher: Cambridge University Press
Print publication year: 2014

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  • Preface
  • Erik Bølviken, Universitetet i Oslo
  • Book: Computation and Modelling in Insurance and Finance
  • Online publication: 05 May 2014
  • Chapter DOI: https://doi.org/10.1017/CBO9781139020251.001
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  • Preface
  • Erik Bølviken, Universitetet i Oslo
  • Book: Computation and Modelling in Insurance and Finance
  • Online publication: 05 May 2014
  • Chapter DOI: https://doi.org/10.1017/CBO9781139020251.001
Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Preface
  • Erik Bølviken, Universitetet i Oslo
  • Book: Computation and Modelling in Insurance and Finance
  • Online publication: 05 May 2014
  • Chapter DOI: https://doi.org/10.1017/CBO9781139020251.001
Available formats
×