Chapter 21
Structured Expert Judgement
in Adversarial Risk Assessment:
An Application of the Classical Model
for Assessing Geo-Political Risk
in the Insurance Underwriting Industry
Christoph Werner and Raveem Ismail
Abstract For many decision and risk analysis problems, probabilistic modelling of
uncertainties provides key information for decision-makers. A common challenge is
lacking relevant historical data to quantify the models used in decision and risk analy-
ses. Therefore, experts are often sought to assess uncertainties in cases of incomplete
or non-existing historical data. As experts might be prone to cognitive fallacies, a
structured approach to expert judgement elicitation is encouraged with the aim to
mitigate such fallacies. Further, it enhances the assessment’s transparency. An area,
in which the assessment and modelling of uncertainties are particularly challenging
due to incomplete or non-existing historical data is adversarial risk analysis (ARA).
In contrast to more traditional application areas of decision and risk modelling, in
ARA intelligent adversaries add more complexity to assessing uncertainties given
that their behaviour and motivations can be versatile so that they adapt and react to
decision-makers’ actions, including actions based on traditional risk assessments.
This often inhibits the availability of historical data. This additional complexity is
also shown by the challenges that machine learning methods face when inform-
ing adversarial risk assessments. As such, using expert judgements for assessing
adversarial risk (at least supplementary) often provides a more robust decision. In
this chapter, we discuss the importance of structured expert judgement for ARA
and present an application of the Classical Model as a structured way for eliciting
uncertainty from experts on geo-political adversarial risks. We elicit the frequency
of terrorist attacks and strikes, riots and civil commotions (SR & CCs), including
insurgencies and civil wars, in various global regions of interest. Assessing such
uncertainties is of particular interest for insurance underwriting.
C. Werner (B )
Department of Management Science, University of Strathclyde, Glasgow, UK
e-mail: WernersChristoph@web.de
R. Ismail
Qomplx:Underwriting, Oxford, UK
e-mail: raveem.ismail@raveem.com
© Springer Nature Switzerland AG 2021
A. M. Hanea et al. (eds.), Expert Judgement in Risk and Decision Analysis,
International Series in Operations Research & Management Science 293,
https://doi.org/10.1007/978-3-030-46474-5_21
459