Why do you think the mathematical models used by insurance companies are so complex?

Answer

The mathematical models used by insurance companies are complex for several reasons:

In summary, the complexity of mathematical models in the insurance industry is a result of the need for accuracy in risk assessment, management of diverse data sources, behavioral dynamics, regulatory considerations, long-term forecasting, capital management, and accounting for catastrophic risks. These factors combined necessitate advanced statistical, actuarial, and computational methods to ensure the financial viability and reliability of the insurance products offered.