Year loss table
The use of lists of years with historical or simulated financial losses is discussed in many references on catastrophe modelling and disaster risk management,[4][5][6][7][8][9] but it is only more recently that the term YLT has been standardized.YLTs are widely used in the insurance industry,[1][2] as they are a flexible way to store samples from a distribution of possible losses.[6] An alternative frequency model is the mixed Poisson distribution, which allows for the temporal and spatial clustering of events.In the fixed parameter YLT the mean of the Poisson distribution used to model the frequency of hurricanes, by year, would be: In the stochastic parameter YLT the mean of the Poisson distribution used to model the frequency of hurricanes, by year, might be: It is often of interest to adjust YLTs, perform sensitivity tests, or make adjustments for climate change.[11] YLTs can be adjusted by applying weights to the years, which converts a YLT to a WYLT.Standard risk metrics can be calculated straightforwardly from YLTs and WYLTs.