Quantifying culture and its implications for bank riskiness

Joel Suss, David Bholat, Alex Gillespie and Tom Reader

‘Bad cultures’ at banks are often blamed for scandals and crises, from the global financial crisis to the mis-selling of payment protection insurance (PPI) in the UK. Yet surprisingly little research has tested this claim. This is because quantifying culture is difficult to do. Our working paper gives it a go. Leveraging unique access to data available to regulators, we diagnose the cultural health of the UK banking sector. We find that banks with organisational cultures two standard deviations below the sector average are associated with a 50% increased risk of failure.

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Planes, boats and automobiles: a discussion of machine learning with telematics data

Ali Soliman

Data plays a central role in all technical aspects of insurance and actuarial work. However, utilisation is often still confined to aggregate premium and claims data. Not so in the case of telematics. Say the phrase ‘black box’ and most people will think of flight recorders fitted to aircraft. But Motor insurers also use the millions of data points generated by black boxes, fitted to more than a million cars in the UK, to price risks. What’s more Marine insurers are getting in on the act. In this post we take an actuarial vantage to explore the use of telematics data and consider whether insurers could be using this ‘gold mine’ of information even more widely.  

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