Guy Thomas, Honorary Lecturer in Actuarial Science at the School of Mathematics, Statistics and Actuarial Science, has received the Kulp-Wright Book Award for 2019 for his book Loss Coverage: Why Insurance Works Better with Some Adverse Selection.
The Kulp-Wright Book Award has been presented annually since 1944 by the American Risk and Insurance Association, the premier association of academic researchers in risk and insurance. The award is intended to recognise the most significant book in the risk management and insurance field published in each year.
Loss Coverage was written as part of the Actuarial Science Group’s ongoing research on public policy aspects of risk classification. Guy has been pursuing this research programme for a number of years, jointly with Pradip Tapadar, Senior Lecturer in Actuarial Science, and research students (MingJie Hao PhD 2017, and more recently Indradeb Chatterjee).
The central insight of this work is that adverse selection – traditionally perceived as a problem by actuaries – can often have benefits for society as a whole. This is because some degree of adverse selection is always needed to maximise ‘loss coverage’, the fraction of society’s total losses which is compensated by insurance.
Publications from this research programme in recent years have included papers all the main English language actuarial journals, and Guy’s book (published by Cambridge University Press) which has now been recognised by the ARIA award.