Related papers: Algorithmic Insurance
Rapid development of advanced modelling techniques gives an opportunity to develop tools that are more and more accurate. However as usually, everything comes with a price and in this case, the price to pay is to loose interpretability of a…
The emergence of autonomous, high-velocity Agentic AI systems is creating an internal assurance scalability crisis. Point-in-time, document-based audits cannot keep pace with non deterministic behaviour and distributed deployments of agents…
We develop a unified model in which AI adoption in financial markets generates systemic risk through three mutually reinforcing channels: performative prediction, algorithmic herding, and cognitive dependency. Within an extended rational…
Recent financial disasters emphasised the need to investigate the consequence associated with the tail co-movements among institutions; episodes of contagion are frequently observed and increase the probability of large losses affecting…
We present a polynomial-time online algorithm for maximizing the conditional value at risk (CVaR) of a monotone stochastic submodular function. Given $T$ i.i.d. samples from an underlying distribution arriving online, our algorithm produces…
We account for time-varying parameters in the conditional expectile-based value at risk (EVaR) model. The EVaR downside risk is more sensitive to the magnitude of portfolio losses compared to the quantile-based value at risk (QVaR). Rather…
People who design, use, and are affected by autonomous artificially intelligent agents want to be able to \emph{trust} such agents -- that is, to know that these agents will perform correctly, to understand the reasoning behind their…
Risk measures are important key figures to measure the adequacy of the reserves of a company. The most common risk measures in practice are Value-at-Risk (VaR) and Conditional Value-at-Risk (CVaR). Recently, quantum-based algorithms are…
As artificial intelligence (AI) becomes increasingly embedded in the core functions of social, political, and economic life, it catalyzes structural transformations with far-reaching societal implications. This paper advances the concept of…
This paper develops a safety analysis method for stochastic systems that is sensitive to the possibility and severity of rare harmful outcomes. We define risk-sensitive safe sets as sub-level sets of the solution to a non-standard optimal…
Motivated by the prominence of Conditional Value-at-Risk (CVaR) as a measure for tail risk in settings affected by uncertainty, we develop a new formula for approximating CVaR based optimization objectives and their gradients from limited…
Human error remains a dominant risk driver in safety-critical sectors such as nuclear power, aviation, and healthcare, where seemingly minor mistakes can cascade into catastrophic outcomes. Although decades of research have produced a rich…
Creating systems that are aligned with our goals is seen as a leading approach to create safe and beneficial AI in both leading AI companies and the academic field of AI safety. We defend the view that misaligned AGI - future, generally…
Reinsurance optimization is a cornerstone of solvency and capital management, yet traditional approaches often rely on restrictive distributional assumptions and static program designs. We propose a hybrid framework that combines…
As Artificial Intelligence (AI) systems proliferate, the need for systematic, transparent, and actionable processes for evaluating them is growing. While many resources exist to support AI evaluation, they have several limitations. Few…
Risks associated with the use of AI, ranging from algorithmic bias to model hallucinations, have received much attention and extensive research across the AI community, from researchers to end-users. However, a gap exists in the systematic…
While artificial intelligence (AI) is advancing rapidly and mastering increasingly complex problems with astonishing performance, the safety assurance of such systems is a major concern. Particularly in the context of safety-critical,…
Artificial Intelligence (AI) systems are now an integral part of multiple industries. In clinical research, AI supports automated adverse event detection in clinical trials, patient eligibility screening for protocol enrollment, and data…
In safety-critical decision-making, the environment may evolve over time, and the learner adjusts its risk level accordingly. This work investigates risk-averse online optimization in dynamic environments with varying risk levels, employing…
In the future, AI will increasingly find its way into systems that can potentially cause physical harm to humans. For such safety-critical systems, it must be demonstrated that their residual risk does not exceed what is acceptable. This…