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stochastic model gives surplus requirements as a function of both risk appetite and management scenarios. The data and analysis requirements for a detailed model are substantial, One of the by-products is a model of stochastic loss development involving accident period, development period, and payment period changes. Taken with the stochastic investment treatment and a projected zero future premium income, the run-off position variability can be quantified, i.e. the distribution of the adequacy of loss reserves can be ascertained
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## 303 structure for the catastrophe risk exposure. The pricing methodology can also be used to assess the relative default spread on catastrophe risk bonds compared with traditional defanltable securities.
structure for the catastrophe risk exposure. The pricing methodology can also be used to assess the relative default spread on catastrophe risk bonds compared with traditional defanltable securities.
4 bstracts and Reviews 267 concept of linear stochastic dominance is sufficient to generate the desired result. These results are linked to existing sufficient conditions in the one safe-one risky asset model, as the condition of strong increase in risk or the monotone likelihood ratio order. They a