REINSURANCE · FUNCTION · 06RDM-03
SURFACE 10 / REINSURANCE / FUNCTION
ACTUARIAL / ANALYTICS
RDM-03 creates an analytics problem before it creates a loss estimate: whether the current data, assumptions, correlation structures and scenarios are capable of representing the dependency at all.- Function
- Actuarial / Analytics
- Surface question
- Correlation / assumption boundary. Does the correlation assumption survive a shared grid dependency? The bounded decision boundary is owned by each institution; see its profile.
- Role classes
- Chief Actuary / Head of Analytics / Head of Catastrophe Perils · decision-owning role classes, confirmed per institution from public role evidence; not title-first routing.
- Governing question
- WHICH ASSUMPTIONS, SCENARIOS OR DATA FIELDS WOULD HAVE TO CHANGE IF CORRELATION IS MATERIALLY DIFFERENT FROM TODAY'S TREATMENT?
GUARD & CREATE
Each row shows a separate decision pathway through the dependency: what this function may need to guard from it, what the dependency could help it create, and which decision may change.
| # | Decision area | Guard from this dependency | Create with this dependency | Decision question |
|---|---|---|---|---|
| 01 | DATA FIELDS | Current datasets may not capture load behaviour, protection logic or relevant grid attributes. | New fields or proxies could make the dependency testable without rebuilding the whole model stack. | Which missing data fields would most affect the RDM-03 determination? |
| 02 | INDEPENDENCE ASSUMPTION | Models may treat exposures as independent where they share an external grid contingency. | A dependency test could identify where independence remains defensible and where it does not. | Which independence assumptions should be challenged first by RDM-03? |
| 03 | CORRELATION STRUCTURE | Existing correlation may be calibrated to known peril or event families rather than this mechanism. | A separate correlation hypothesis can be tested before it is admitted into pricing or capital models. | What correlation structure would RDM-03 require if the dependency survives? |
| 04 | SCENARIO FREQUENCY | Frequency cannot be inferred cleanly from a small set of observed initiating events. | Explicit uncertainty can prevent false precision while still supporting scenario analysis. | What frequency statement is supportable without overstating the evidence? |
| 05 | SEVERITY PATHWAY | Insured consequence remains unproven, so severity modelling can outrun evidence. | A staged pathway can separate physical propagation from insured loss translation. | What must be established before a RDM-03 severity estimate is credible? |
| 06 | AGGREGATION | Conventional aggregation may not group accounts linked by the same external dependency. | A new aggregation key or proxy could reveal hidden concentration. | How would exposures need to be grouped to test RDM-03 accumulation? |
| 07 | MODEL VALIDATION | A new variable can create spurious precision if it is not independently testable. | Falsifiable validation criteria can keep RDM-03 outside production models until warranted. | What validation evidence would be required before RDM-03 enters a model? |
| 08 | DECISION OUTPUT | Analytics can produce an interesting signal without changing a real decision. | A decision-linked output can test whether RDM-03 matters to underwriting, portfolio or enterprise risk. | Which decision would use the RDM-03 analytic output if it proved material? |
This is the governing question for this decision territory. The matrix above decomposes it into the smaller consequences, opportunities and questions that can be tested independently.
GUARD · CONSEQUENCE REPORT
Assumptions, variables, scenarios, data fields and correlation treatments that should be tested or challenged.
CREATE · OPPORTUNITY REPORT
New variables, scenarios, monitoring and dependency-aware analytics capability.