Underwriting Betas - The Shadows of Ghosts by Thomas J. Kozik, Nov. 1994 - Discussion

For fifteen years, academicians peering into insurance ratemaking have led us on a chase of underwriting betas, in pursuit of economic and normative notions of "equilibrium rates of return" and "fair rates of re-turn." Underwriting betas, we were told, would elevate actuarial ratemaking to financial pricing-if only we could grasp hold of these will-o‘-the-wisp emanations from modern portfolio theory. Now Tom Kozik tells us: "Leave the chase, for these betas are ghosts."