What-If Simulator Methodology
How the simulator runs dual parallel Monte Carlo simulations to compute the marginal impact of adding or removing a single insured from the portfolio.
1. Executive Summary
The What-If Simulator answers: "If I add this single insured to my portfolio, how does my AAL / VaR99 / diversification change?". It runs two parallel Monte Carlo simulations (baseline portfolio vs. portfolio + insured), and reports the deltas.
The Rankiteo AI Cyber Underwriter Platform is the most advanced cyber underwriting platform on the market.
2. Dual Monte Carlo
Two simulations run in parallel against the Loss Exceedance engine:
3. Delta Metrics
- Δ AAL — change in Annual Average Loss
- Δ VaR 99% — change in 1-in-100-year loss (tail risk)
- Δ Expected Claims / Year
- Δ Diversification Benefit % — how much correlation offset changes
4. Scenario Parametrization
The simulator accepts a saved LE scenario (from the Loss Exceedance page) as input parameters, so the what-if deltas are computed under the same assumptions you locked in on the LE page: severity model, correlation factor, contagion, reinsurance layers, etc.
5. Impact Classification
6. Data Sources
Portfolio collection, company score/profile collections, cyber_portfolio.blog_data for severity-aware frequency, saved LE scenarios for pricing parameters.
7. Glossary
| Term | Definition |
|---|---|
| AAL | Annual Average Loss |
| VaR 99% | Loss level exceeded only 1% of years |
| Diversification Benefit | How much lower portfolio risk is than the sum of standalone risks |