DECISION MAKING

Decision Making

Decision Making

Introduction

The main purpose of this paper is to discuss and resolve a decision which is involved in a major, current complex corporate situation, governmental situation or other organizational situation that a key decision maker must make. In this paper a model of decision making model will be presented which will illustrate the facts they come across while making a decision.

I am the company in this case and the client is the manager of the Intermediaries & Reinsurance Underwriters Association (IRU, Inc.). The client was having a problem with the catastrophe modeling exercise and wanted to make a decision that will there be any impact on his reinsurance purchase strategy. He was uncertain regarding the impact on the accuracy of catastrophe models (Arnott, 2007). The company is the underwriters association, and is a provider of the training and development in the field of reinsurance. The company is American based company, and helps in the reinsurance issues.

Diagnosis of the Decision-Making Case

This case study belongs to Intermediaries & Reinsurance Underwriters Association that has faced some problem related to its client who was a reinsurance manager in Intermediaries & Reinsurance Underwriters Association. The client was confused about the reasons that created the uncertainty in the modeling outputs. He was not sure about the ways and procedures to apply it to his own exposure.

At this point it was necessary to analyze the type of the problem the client is mentioning. Without proper analysis of the problem the decision making becomes obsolete. For the purpose of the identification of problem we could have identified different approaches in order to identify the nature of the problem. We used the systems approach in order to identify the problem. The systems approach has gained popularity in order to find the problems associated with the company. Therefore, this approach was very helpful for us in order to identify the problem of Intermediaries & Reinsurance Underwriters Association. Problem solving is a most important tool, which is necessary for any company if it wants to maintain its business and success. It is necessary for the firm, that it should choose the right approach or model in order to solve the problems.

For this purpose, manager of Intermediaries & Reinsurance Underwriters Association was seeking help in making identifications of the possible range of losses, analysis of severity and incorporating frequency. This analysis can help him to get the proper results so that he can apply the results on his portfolio. He can achieve his financial targets so that he can structure a reinsurance program through which he can fulfill his company's needs. In order to help we started its planning to make a decision, and for this we firstly had a discussion with this client. We had a discussion with the client and asked him about his outcome of the exercise, and used the advanced mathematical techniques to support him for the upper and lower loss that was based on the probabilistic ...