Here is a nice chart showing, for several countries, the increase in life expectancy after retirement over the last roughly 40 years. Important data for anyone discussing whether or not to increase retirement ages necessary for full benefits.
- Rick
Tuesday, March 9, 2010
Thursday, February 18, 2010
Boys versus Girls
Today's (February 18) Chicago Tribune (page 25, first page of the Business section) has an article titled "Teen Risk Gap Shrinks" (link here). According to the article (which references a new Allstate Foundation report), the gap between teen boys and teen girls in terms of driver risk has been diminishing. Historically, teen boys have been much riskier drivers, and more costly to insure, than teen girls -- but that gap is now characterized as narrowing.
Although... The article keeps referring to teenage girls as "admitting to" speeding, texting, etc., more often than teenage boys. It will be interesting to see whether this survey-type data, which I would think depends upon the honesty of those surveyed, is ultimately borne out by future emerging loss data...
By the way... It still shocks me that anyone would even think about texting while driving. It perhaps shocks me even more that we often have to engage in societal arguments about whether or not it should be illegal...
- Rick
Although... The article keeps referring to teenage girls as "admitting to" speeding, texting, etc., more often than teenage boys. It will be interesting to see whether this survey-type data, which I would think depends upon the honesty of those surveyed, is ultimately borne out by future emerging loss data...
By the way... It still shocks me that anyone would even think about texting while driving. It perhaps shocks me even more that we often have to engage in societal arguments about whether or not it should be illegal...
- Rick
Using the Terminally Ill Against Insurers
In Tuesday's (February 16) Wall Street Journal, page A1, there is a very interesting article titled "Investors Recruit Terminally Ill To Outwit Insurers on Annuities." Well worth seeking out for actuaries and actuarial science students.
We certainly seem to be in an environment these days in which anything goes against the "big, bad" insurers...
- Rick
We certainly seem to be in an environment these days in which anything goes against the "big, bad" insurers...
- Rick
Monday, January 18, 2010
Risk Interrelationships
This "Risks Interconnection Map" from the World Economic Forum 2010 is interesting. You can move your cursor around and click on the risk nodes, providing additional information regarding the frequency, severity, and interconnections associated with that risk. Fun to play with -- and a nice example of the kinds of things we are all doing in Enterprise Risk Management and related areas.
- Rick
- Rick
Saturday, January 9, 2010
Terrorism Risk in Context
A key role played by actuaries and risk managers is the assessment of risk. An article in today's Wall Street Journal, "Undressing the Terror Threat," attempts to put the risk of terrorist attacks into perspective, and some some interesting statistics.
Also, see the accompying text, "Crunching the Risk Numbers."
- Rick
Also, see the accompying text, "Crunching the Risk Numbers."
- Rick
Organ Recital
"The Meat Market" is an interesting article in today's (Jan. 9, 2010) Wall Street Journal, discussing the current situation with respect to organ donation, shortages of needed organs, and possible approaches to providing incentives to increase donations. Relevant to actuarial science for the topic's potential impact on health care costs, healthiness and longevity (perhaps of both recipients and donors), etc.
- Rick
- Rick
Wednesday, August 12, 2009
Health Care Debate II
Here's a quote from President Obama's health care talk in Portsmouth, NH, yesterday (per seacoastonline):
"A recent report actually shows that, in the past three years, over 12 million Americans were discriminated against by insurance companies because of a pre-existing condition. Either the insurance company refused to cover the person, or they dropped their coverage when they got sick and they needed it most, or they refused to cover a specific illness or condition, or they charged higher premiums and out-of-pocket costs. No one holds these companies accountable for these practices."
Where to start...
(1) Insurers ARE held accountable -- in several ways, but especially through the competitive marketplace.
(2) Insurers are not endowed with a bundle of money which they can to choose to either pay out or not. Pricing of an insurance policy is predicated on the frequency and severity of potential losses stemming from the risks being underwritten and insured in the policy. The policy -- which is a legal contract -- spells out the conditions, exclusions, etc., under which the indemnification relationship between the insurer and policyholder will operate. Generally, and in theory, when an insurer makes a coverage decision regarding whether a policy should respond to a particular situation, it is based upon the provisions of the policy (which, again, is a legal contract). (This is not to say that an insurer never acts "inappropriately" -- but that's a different issue that has little, if anything, to do with the broader public policy debate.)
(3) It is not "discrimination" for an insurer to enforce a pre-existing condition exclusion in an insurance contract. Such exclusions, when a part of an insurance policy, are there from the start. They are common, agreed to, and they impact the level of premium charged for the policy. Among other things, the impact of a policy exclusion is typically to make the policy affordable (or more affordable) and/or prevent moral hazard and/or... Thus, elimination of such an exclusion is certainly possible -- but the premium would need to increase in order to cover the additional risk which the insurer is taking on.
(4) When one encounters statements along the lines that an insurer "refused to cover" someone or something, remember: an insurer is a financial firm with a fiduciary obligation to ALL its policyholders (and owners and other stakeholders). When the price of its product is based upon a certain scope of coverage, the insurer potentially violates that fiduciary responsibility if it pays out more than the contract specifies.
There are very real PUBLIC POLICY issues involved in the current health care debate. It is reasonable to discuss, AS A SOCIETY, whether a certain type or level of coverage should be mandated. Most of us have mixed feelings about these things -- it's hard not to, when there are ample personal anecdotes floating about involving health and medical care. But the debate needs to start from a fair and realistic perspective regarding insurance and its role in society and the economy.
- Rick
"A recent report actually shows that, in the past three years, over 12 million Americans were discriminated against by insurance companies because of a pre-existing condition. Either the insurance company refused to cover the person, or they dropped their coverage when they got sick and they needed it most, or they refused to cover a specific illness or condition, or they charged higher premiums and out-of-pocket costs. No one holds these companies accountable for these practices."
Where to start...
(1) Insurers ARE held accountable -- in several ways, but especially through the competitive marketplace.
(2) Insurers are not endowed with a bundle of money which they can to choose to either pay out or not. Pricing of an insurance policy is predicated on the frequency and severity of potential losses stemming from the risks being underwritten and insured in the policy. The policy -- which is a legal contract -- spells out the conditions, exclusions, etc., under which the indemnification relationship between the insurer and policyholder will operate. Generally, and in theory, when an insurer makes a coverage decision regarding whether a policy should respond to a particular situation, it is based upon the provisions of the policy (which, again, is a legal contract). (This is not to say that an insurer never acts "inappropriately" -- but that's a different issue that has little, if anything, to do with the broader public policy debate.)
(3) It is not "discrimination" for an insurer to enforce a pre-existing condition exclusion in an insurance contract. Such exclusions, when a part of an insurance policy, are there from the start. They are common, agreed to, and they impact the level of premium charged for the policy. Among other things, the impact of a policy exclusion is typically to make the policy affordable (or more affordable) and/or prevent moral hazard and/or... Thus, elimination of such an exclusion is certainly possible -- but the premium would need to increase in order to cover the additional risk which the insurer is taking on.
(4) When one encounters statements along the lines that an insurer "refused to cover" someone or something, remember: an insurer is a financial firm with a fiduciary obligation to ALL its policyholders (and owners and other stakeholders). When the price of its product is based upon a certain scope of coverage, the insurer potentially violates that fiduciary responsibility if it pays out more than the contract specifies.
There are very real PUBLIC POLICY issues involved in the current health care debate. It is reasonable to discuss, AS A SOCIETY, whether a certain type or level of coverage should be mandated. Most of us have mixed feelings about these things -- it's hard not to, when there are ample personal anecdotes floating about involving health and medical care. But the debate needs to start from a fair and realistic perspective regarding insurance and its role in society and the economy.
- Rick
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