ASYMPTOTICS FOR VAR AND CTE OF TOTAL AGGREGATE LOSSES IN A BIVARIATE OPERATIONAL RISK CELL MODEL

Yishan Gong, Yang Yang*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This paper considers a bivariate operational risk cell model, in which the loss severities are modelled by some heavy-tailed and weakly (or strongly) dependent nonnegative random variables, and the frequency processes are described by two arbitrarily dependent general counting processes. In such a model, we establish some asymptotic formulas for the Value-at-Risk and Conditional Tail Expectation of the total aggregate loss. Some simulation studies are also conducted to check the accuracy of the obtained theoretical results via the Monte Carlo method

Original languageEnglish
Pages (from-to)1321-1337
Number of pages17
JournalJournal of Industrial and Management Optimization
Volume18
Issue number2
DOIs
Publication statusPublished - Mar 2022
Externally publishedYes

Keywords

  • Asymptotic estimates
  • Bivariate operational risk cell model
  • Conditional tail expectation
  • Total aggregate loss
  • Value-at-risk

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