The RSS Glasgow local group held a meeting in September 2016, titled 'Multivariate models, probabilities of ruin & league tables; So, are you paying too much for your car insurance?', jointly with the Institute of Mathematics and its Applications (IMA) to discover the modelling behind insurance pricing.
The seminar was delivered by John Birkenhead, an independent consulting actuary who specialises in the quantification and communication of risk. The talk examined the theoretical statistical basis of risk (multivariate probability distributions), EU regulations concerning theoretical 'probabilities of ruin', theoretical 'customer lifetime value' models as well as illustrations of the theories in action with some real-time examples from price comparison websites.
We also learnt about forward pricing, statistical quirks in the data and some pricing anomalies, all explainable from the theoretical considerations.
So, are you paying too much for your car insurance? In short, yes!