It feels to me like a natural modeling choice. To apply simple physics to child-on-swing, model the child as a point mass. To apply Kelly to many highly correlated bets, model them as one large bet. To apply Kelly to many weakly correlated bets, model them as many independent bets. And we also need to make some modeling choice to convert insurance policies to a series of independent bets.
Maybe you’re saying that we need a reason to justify those choices, because bad model choices can give bad results. So we need to “go outside the Kelly framework” to get that justification. If so, I agree.
It feels to me like a natural modeling choice. To apply simple physics to child-on-swing, model the child as a point mass. To apply Kelly to many highly correlated bets, model them as one large bet. To apply Kelly to many weakly correlated bets, model them as many independent bets. And we also need to make some modeling choice to convert insurance policies to a series of independent bets.
Maybe you’re saying that we need a reason to justify those choices, because bad model choices can give bad results. So we need to “go outside the Kelly framework” to get that justification. If so, I agree.