While actuarial methods are widely used to manage risks in various economic domains, they are not typically applied to biosecurity risk management. Currently, biosecurity strategies and policies are primarily based on scientific analysis of threats, with decisions made based on expected cost and benefit. Actuaries, however, consider the full distribution of potential loss when assessing risk cost, including not only the expected loss but also a risk margin to account for uncertainty.
As part of CEBRA’s Incentive-compatible biosecurity policies - a framework for regulatory design project, this study leverages existing scientific knowledge and expertise to develop an actuarial model for assessing the cost of risks arising from biofouling on inbound vessels.
By providing a more complete picture of the financial consequences of biosecurity risks, an actuarial framework contributes to a better understanding of the cost associated with the biosecurity system as well as provide a financial analysis of alternative strategies for allocating biosecurity efforts.
In this CEBRAnar, Associate Professor Rui Zhou discusses the cost of biosecurity risks from an actuarial perspective, emphasising the cost of uncertainty, and demonstrating how the framework can be used to guide practice. Peter Wilkinson, Director in DAFF’s Marine & Aquatic Biosecurity area will also join the conversation on how actuarial models can promise significant improvements in managing various biosecurity risks.
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Негізгі бет CEBRAnar #21: Cost of Biosecurity Risks through an Actuarial Lens
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