2021 Reinsurance Call Paper Prize Announcement
The 2021 Reinsurance Call Paper Prize has been awarded to Neil Bodoff for his paper, “The Roulette Wheel and the Drunken Sailor”. The Reinsurance Call Paper Program happens every two years and is open to anyone to participate. Papers which make a particularly strong contribution to the literature may be awarded a cash prize at the discretion of the reinsurance working group. Mr. Bodoff’s paper was awarded $5,000.
Mr. Bodoff’s paper looks at the role of human decision-makers in risk management. In particular, he examines some of the key ideas in principal-agent theory. This is a perspective which differs from established pricing concepts like rate or return or the cost of capital. The principal-agent theory approach recognizes and quantifies the cost when we relax the assumption of completely rational decision-making
When reviewing Mr. Bodoff’s paper, the working group was particularly struck by the clarity of the exposition and the fact that the paper was very readable. Reviewers welcomed the addition of these concepts to the risk management literature. Moreover, they felt that the ideas in the paper could be implemented, or at least explored in a practical setting.
Mr. Bodoff presented his prize-winning paper as a CAS webinar on September 30.