Thu 04 May 2023 - Part of the Current Issues in Life Assurance (CILA) 2023 Webinar Series
For those forecasts characterised by a lack of data, extreme events or high uncertainty, expert judgement is a powerful, under-utilised ally for both costing and reserving decisions. The quality of expert judgement can vary widely, though.
Behavioural economics studies indicate that cognitive biases and inconsistencies (noise) undermine the quality of expert judgement. We aimed to identify the degree of noise and bias in various re/insurance decisions and test the effectiveness of a custom-built toolkit for boosting the accuracy of expert judgement. We achieved substantial improvements in forecasting accuracy in a pre-post analysis (5-40%) when applying our toolkit to a variety of forecasts.
Chair
Bank of England
Maura Feddersen is an economist focused on using insights from behavioural and decision science to boost the robustness and accuracy of forecasts. At Swiss Re, she’s responsible for leading the development and adoption of mechanisms that allow experts to optimise their foresight and judgement in the face of increasingly complex and changeable business conditions. Before joining Swiss Re, Maura worked as a behavioural economist at the UK’s financial regulator. Her background is economic consulting, serving primarily financial sector clients.