Not to protect the insurance industry, which I know nothing about, but how does their hypothetical failure, misery and bailout relate to, or validate the study in question?
Criticism: Academia fails to model the real world, in contrast to industry ("is way behind industry").
Response: An entire industry of competing and well-funded actors that specialize in modeling and predicting expensive failure states also failed to model the world accurately.
Implication of Response: Where is the evidence that this is inferior to industry?
Response: An entire industry of competing and well-funded actors that specialize in modeling and predicting expensive failure states also failed to model the world accurately.
Implication of Response: Where is the evidence that this is inferior to industry?