Context of Actuarial
Insurance has always been a balancing act of actuarial math and luck. Companies load up on selling policies and build capital in the good years, when losses are low, and then pay out massive claims in the bad years when catastrophic losses ramp up.
One difference now: The “bad cycles” may be longer due to more extreme weather and population growth in danger zones like Florida. And it’s unclear if actuarial science and climate forecasting can keep up with “100-year floods” and other rare events happening more frequently.
–Barron’s
Related Topic
–How Do Insurance Companies Make Money and How Do They Work | Video by The Infographics Show
