The God Clause

I ran across a piece in Bloomberg Businessweek that is very interesting. The God Clause and the Reinsurance Industry It is a fairly long story but the gist of it is that reinsurer’s, companies that essentially insure insurance companies, have some very sophisticated models for assessing risk but even they are not omniscient when it comes to natural events. The way these companies caegorize risk is interesting in the extreme. Lloyds of London has an entire section of their website devoted to analyzing risk and they annually put out a list of Realistic Disaster Scenarios.   What I found most interesting were the examples in the story of the way … More after the Jump…