Warren Buffett and Ajit Jane: How Do You Price Unconventional Insurance Contracts?

Warren Buffett: Figure out what works and do it. And Charlie and I have seen the extremes in human behavior in so many unexpected ways. We start off with as much science as we can use looking at historical data that relates to the risk or something that comes close to relating to the risk that we are looking at. Then beyond that, if there's not enough historical data we can look at, then clearly we have to make a judgment in terms of what are the odds of something like that happening. The absolute asset test is I pick up the phone and call Warren, Warren, here's the deal, what do you think? Okay, you're done, Warren.