Microinsurance

A couple of short news reports on "microinsurance," courtesy of World Risk and Insurance News:

Report 1

Report 2

- Rick

Now I've Seen Everything - Public Pension Edition

Borrowing from the very same pension fund to which you owe money in order to make your required contributions...

If you don't believe it, check out the New York Times article, "To Pay New York Pension Fund, Cities Borrow From It First."

- Rick

Climate Change and Insurance

Here's a case worth watching - one of many possible future climate change-related insurance and risk management issues.

In this case, the issue is how "climate change" relates to the definition of a loss or occurrence in an insurance policy. Ultimately, of course, another issue will be whether a company can be held liable for causing or contributing to climate change - and whether "damage" from climate change can be identified reasonably and measurably.

Down the road, consistency in these and other decisions will be critical. For example, if climate change is accepted as leading to more frequent and harsher hurricanes, then logically insurers should be allowed rate increases to reflect that greater exposure.

The next decade or so should be interesting...

- Rick

American Airlines and Pensions

We're watching a case study unfold before our eyes: American Airlines, in bankruptcy reorganization, considering what to do about its massively underfunded pension plan.

From BusinessInsurance.com:

AA wants to terminate its pension plans

Pension Benefit Guaranty Corporation (PBGC) takes action

A lawmaker chimes in

- Rick

Less-Than-Fully-Accurate Predictions of Technology

From the Scientific American website: "Use It Better: The Worst Tech Predictions of All Time." Whenever I see a list like this, I always wonder what predictions or assumptions which we all embrace today, will turn out (perhaps even in the relatively short-term) to be utterly wrong.

- Rick

The Mathematics of Serial Killing?

When I first saw this article, "Math formula may explain why serial killers kill," on foxnews.com earlier today, I was more than skeptical. The article describes research on the spacing between murders of a 1980s serial killer. "The researchers found that the seemingly random spacing of his murders followed a mathematical distribution known as a power law." The article also says that "The finding suggests an explanation for why serial killers kill."

Now, lots of natural and human-oriented things and processes have been empirically linked to a power law: wealth, city population, the occurrence of earthquakes, etc. In a power law, the frequency of something varies according to some characteristic of that thing.

The power law is so prevalent, in fact, that one wonders whether there might be some yet-unknown law or factor that causes its emergence naturally and frequently.

What concerned me in the first two paragraphs of the above article was the reference that the power law finding might represent an "explanation" for serial killing. An empirical finding that data follows a power law can be interesting - but how could it be explanatory without understanding the natural forces, if any, that might lead to frequent emergence of the power law?

Nevertheless, I admit - I found the rest of the article highly interesting and compelling...

- Rick

A List to Avoid

Here's a list you don't want to be on: Business Insurance's 2011 Insurance Fraud Hall of Shame.

- Rick