As mentioned yesterday, I gave a talk, this afternoon, entitled From Contemplative to Predictive Modeling (in actuarial science and risk management). Slides are available online, but maybe I can take some time to explain what I talked about…
It is usually claimed that actuaries build ‘predictive models’ but most of the time, what they consider would be simply ‘contemplative modeling’, in the sense that they use past information and hope that the future will be more or less the same (corresponding to the idea of generalization in machine learning). In the context of climate change (but also when modeling insurance market competition) it is not the case, data used to train models do not have the same distribution as the one we will have in the future.
