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The Role of Models in Management Decision-Making

  • Bernard Bolle-ReddatEmail author
  • Renaud Dumora
Chapter
Part of the EAA Series book series (EAAS)

Abstract

Managing is deciding. Today no decision is made in the insurance world without using models. Decision-makers are facing many challenges in this situation: models might evolve from entity-specific to standardized under the pressure of regulators and the lack of diversity of providers, being less relevant and trigerring unintended sheep-like behaviours. Models are good at simulating the future from the past but they fail to simulate the unexpected non-linear phenomenon. Often more than one model is used but their consistency is not guaranteed. Understanding the model is a key issue for decision-makers. Models say what a pure rational based decision should be ignoring strategy and politics, discarding the true beliefs of the person making the decision. Models could not duplicate the decision-making process; however they could be the Fifth Solvency II key function.

Keywords

Asset Allocation Internal Account Standard Board Solvency Calculation Central Scenario Solvency Capital Requirement 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  1. 1.BNP Paribas CardifParisFrance

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