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Empowering the future of legal decision-making
© LexPredict 2012-2016
@lexpredict
www.lexpredict.comcontact@lexpredict.com
From Law of the Seato Legal Underwriting
Professor Michael BommaritoCEO, LexPredict
Illinois Tech - Chicago KentUniversity of Michigan
2
(drinks on me)Inspiration and Context
First Recorded Insurance(ca. 1000 B.C.E.; translation)
First Catastrophe Bond/ILS(1997)
1. Excluding bottomry and respondentia under Babylonian law.2. Figure 7.5 from Alternative Risk Transfer, Erik Banks (Wiley Finance), pp. 126.
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(equitability without price)Codified Risk Transfer
1. English translation from Opinions of Paulus, a Roman jurist ca.2. For more on the Osaka, cf: https://goo.gl/PE2X5O
First Recorded Insurance(ca. 1000 B.C.E.; translation)
“It is provided by the Lex Rhodia that if merchandise is thrown overboard for the purpose of lightening a ship, the loss is made good by the assessment of all which is made for the benefit of all.”
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Computational Law
Leibniz(De Arte Combinatoria, 1666)
Ethereum & Solidity(2013)
1. For more on Leibniz’s journey and I Ching, cf: Leibniz: An Intellectual Biography: Maria Rosa Antognazza.
SOLIDITY
=
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But when?
Today
?
The Future
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(including, but not limited to)Types of Hazard/Risk
Liquidity“you” don’t have funds on hand (or ability to convert assets to funds) when you need them
Longevity“you” live longer than expected
Mortality“you” die unexpectedly
Counterparty“you” have assets or cashflows tied to another party’s solvency and behavior
Geopolitical“you” have assets or cashflows tied to a region or political entity’s institutions and behavior
Natural Catastrophe“you” have assets or cashflows tied to mother nature (and even father sky)
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(“legal” flavors)Types of Hazard/Risk
Counterparty
Geopolitical
Employment
Litigation
Regulatory & Compliance Intellectual Property
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(on the one hand)Types of Hazard/Risk
EmploymentWorkers Comp.
LitigationProfessional
Liability
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(and on the other)Types of Hazard/Risk
1. Left to right: Myles Jack ($5M), Jaylon Smith ($5M), Ifo Ekpre-Olomu ($3M).
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Why the Disparity? common wisdom(s)
Risk Transfer
Frequency of Events
Severity of Events
Event Models
Data Availability
Data Consistency
Data Quantity
Moral & Morale
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(really?)Why the Disparity?
1. Placement slip for the infamous passage of the HMS Titanic.
Lloyd’s Subscription Room(engraving, Thomas Rowlandson, 1809)
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(really?)Why the Disparity?
1. John Speed, ca. 1630.2. Van Den Keere, ca. 1610.
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(“cult of the expert”)Syndicate of One
1. Placement slip for the infamous passage of the HMS Titanic.
Maritime Hazards, ca. 1800
Legal Hazards,ca. 2016
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Why the Disparity? common wisdom(s)
Risk Transfer
Frequency of Events
Severity of Events
Event Models
Data Availability
Data Consistency
Data Quantity
Moral & Morale
Cultural
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(“cult of the expert”)Syndicate of One
1. Placement slip for the infamous passage of the HMS Titanic.
Decision-Making Science,ca. 2016
Legal Hazards,ca. 2016
vs.
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(“cult of the expert”)Syndicate of One
1. Placement slip for the infamous passage of the HMS Titanic.
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(“cult of the expert”)Syndicate of One
1. Diagram generated from LexSemble/LexPredict Dispute Analyzer.
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Outside Counsel Internal Staff Algorithm
(a legal ensemble)Syndicate of Many
Partners AssociatesLabor
Litigation
Wrongful Termination
Model
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Outside Counsel Internal Staff Algorithm
(a legal ensemble)Syndicate of Many
Partners AssociatesLabor
Litigation
Wrongful Termination
Model
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(a legal ensemble)Syndicate of Many
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Context
Today
?
The Future
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Goal
Colossus 2020-I A(First US Legal-Linked Security)
1. Wood engraving of the Colossus of Rhodes, Sidney Barclay, ca. 1875.2. For contrary thoughts on securitization, cf: https://ssrn.com/abstract=2320030
3. Bonus: Colossus Mark 1 was also the first GP digital computer.FIN
Empowering the future of legal decision-making
© LexPredict 2012-2016
@lexpredict
www.lexpredict.comcontact@lexpredict.com
From Law of the Seato Legal Underwriting
Professor Michael BommaritoCEO, LexPredict
Illinois Tech - Chicago KentUniversity of Michigan
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