What Does Structural Risk Modeling Methods Mean?

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What does Structural Risk Modeling Methods mean? Read on to discover the definition & meaning of the term Structural Risk Modeling Methods - to help you better understand the language used in insurance policies.

Structural Risk Modeling Methods

Structural Risk Modeling Methods

Models based on explicit cause and effect relationships, not simply statistical relationships such as correlations. The cause/effect linkages are typically derived from both data and expert opinion. The principal advantage over statistical methods is the ability to examine the causes driving certain outcomes (e.g., ruin scenarios) and the ability to directly model the effect of different decisions on the outcome.

We hope the you have a better understanding of the meaning of Structural Risk Modeling Methods.

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