Danny heads up D&O, E&O and Cyber in the US for Trans Re, one of the market leaders in each line. 

In this episode we run through all the big issues in D&O:
-Silicon Valley Bank and bank runs and how Directors and Officers liability underwriters are incorporating lessons

Dana Hojnowski’s favorite claim. (0:00)
What’s wrong with securities fraud allegation? (2:42)
How do you know when a company is violating their duty of care to their shareholders? (5:14)
What are the lessons learned from Silicon Valley Bank as an underwriter? (7:51)
What would happen if a company didn't buy D&O? (9:36)How is the US different from other countries in D&O litigation? (13:00)
D&O and crypto (15:13)
The resolution of the D&O puzzle of Special Purpose Acquisition Companies (SPACs)? (18:28)
Where has insurance made better risks? (24:19)
The cyber loss is going to come from someone trying to hack you -. (25:59)
How did you get into this kind of business where you're from? (28:11)

youtube: https://youtu.be/6XLjsp67UFE

Twitter: @davecwright
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Social Science of Insurance Essays

Amy Finkelstein is Professor of Economics at MIT. Amy’s research focuses on market failures and government intervention in insurance markets and she has won numerous awards include a MacArthur Fellowship and the John Bates Clark Medal. Amy is co-author with Liran Einav and Ray Fisman of the forthcoming book: “Risky Business: Why Insurance Markets Fail and What to do about it”.

Buy the book
https://www.amazon.com/Risky-Business-Insurance-Markets-About/dp/0300253435/
Amy on wikipedia 
https://en.wikipedia.org/wiki/Amy_Finkelstein

episode on youtube: https://youtu.be/nvVlNSolE3s
show notes: https://notunreasonable.com/?p=7706

When is government compelled insurance a good idea? 0:02
How the public option or the mandate can create two different equilibria in the market. 8:53

Dental insurance isn’t really an insurance product. 13:27

The subsidy is not an objective, it’s a problem. 19:18

How do we choose whether to pay attention to some of these issues or not? 25:47

Why do we feel compelled to act when people are suffering from chronic conditions? 29:53

What are the benefits of giving people cash instead of insurance? 33:44

The problem of moral hazard in insurance. 39:51

The concept of affinity and intermediation. 45:28

Insurance can be learned the hard way. 51:02

What happens when the price of insurance gets too high in compulsory markets. 54:46

Why nobody ever wants to buy insurance. 1:01:06

Some of the studies that contradict what you think you know. 1:05:23

Twitter: @davecwright
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Social Science of Insurance Essays

Nobody knew how to price volatility until now. I bet you're surprised! 

This isn't hyperbole, Steve Mildenhall and John Major have a deep and thorough understanding of all the relevant literatures and have been part of a loosely collaborative team of academics and actuaries working out the details of a coherent, actionable theoretical foundation for pricing insurance for their entire careers. Now that they're both retired they've delivered us the tome the actuarial profession needs. 

Their new book: *Pricing Insurance Risk: Theory and Practice* is an absolute masterpiece. It is theoretically sound and immensely practical. Until today no financial institution could choose a sophisticated portfolio model that wasn't hiding biases or inefficiencies that had to be 'band-aid-ed' over with coarse heuristics. Very importantly how does one calculate the margin required to service the capital base when the risks vary so much? The science of managing a portfolio of incompletely diversified, highly volatile financial instruments has gained serious ground with this book. 

Steve Mildenhall is head of analytics at Qualrisk, an Insurance consulting firm, formerly assistant professor of actuarial science at St. John's University, and before that CEO of analytics at Aon. This is Steve's fifth appearance on this show. John Major is principal at Major analytics and the former director of actuarial research at guy carpenter. 

youtube: https://youtu.be/ZQHpMVH7d9s
show notes: https://notunreasonable.com/?p=7694

Steve and John did a tutorial on this material and more with some technical examples you can see here: https://www.youtube.com/@ermdiner/
Here is a link to the spreadsheet used in the tutorial: 
https://docs.google.com/spreadsheets/d/1CV3sF52cjPH8mw6T4E-jOfCNDagCptRs4xBZTug8Z0A/edit?usp=sharing

Here are some Not Unreasonable Podcast Episodes about related content:
Samir Shah on Innovating Capital
https://www.buzzsprout.com/126848/8171216
and
Steve on the Macro History of insurance Part 1:
https://www.buzzsprout.com/126848/8121657
And Part 2
https://www.buzzsprout.com/126848/8507268

In the show we cover:
How do you think of the cost of running the capital side of insurance?
2:06
The importance of connecting the value to the value of the original customers.
5:18
What is the value of reinsurance?
7:34
The timing of Hurricane Andrew relative to the early cat models.
18:44
The history of cat models in the 60s.
21:22
What the CEO’s are disagreeing about in volatility?
33:04
What could possibly justify 50% margins in these companies?
42:59
What doesn’t make sense about the intentionality argument.
46:28
What is the market price for risk?
48:02
The difference between allocating capital vs. allocating margin.
1:01:39
What’s the right metric for determining performance of a reinsurance company?
1:08:07
The further removed you get from loss, the cheaper the capital is as a percent of capital, but the more expensive the insurances are.
1:22:59
How long did it take for these ideas to emerge? How did they evolve?
1:24:55
The key to unlocking a lower cost of capital
1:29:07
What is the required return in a regulated environment?
1:32:55
The amount of leverage you get is huge.
1:48:24
Steve’s envelope theorem and how it works.
1:53:18
What’s the insight that underlies the ability to determine bounds for spectral measures?
1:56:46
Characterizing the worst risk-adjusted expected outcome.

Twitter: @davecwright
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