Simulation risk modeling method

{
  "id": "MLC-T-INS-003088",
  "term": "Simulation risk modeling method",
  "field": "Insurance and risk management",
  "definition": "A quantitative technique for assessing risk by running a large number of computer-generated scenarios to model the potential outcomes of a decision or a set of variables. This method assigns probability distributions to uncertain inputs and then repeatedly samples values from those distributions to generate a distribution of possible results. Monte Carlo simulation is a widely used example of this method in insurance for pricing, reserving, and capital adequacy calculations.",
  "url": "https://mlchart.com/terminology/insurance/simulation-risk-modeling-method/"
}