Knowing your own history

[Andy Lang]

It has been said that failure to learn the lessons of history condemns us to repeat it.

I say that failure to learn your own history, in this case actuarial history, may well condemn actuaries to oblivion.

This would be a pity, since they hold the key to some of the seemly intractable problems in the world.

The U.S. has had the largest growth in prosperity the world has ever seen, in the post-WWII period.

There were two actuaries who were largely responsible for that growth--more than any other two people, whether actuaries or not.

Who can name them, what they did, and why it contributed so much to that growth?

Hint: Both are dead, one a while back, the other very recently.

[Mr. Grim]

Andy, how can that be you are not dead (or are you?) Spooky, you did disappear for awhile - I guess it takes time to elevate to the actuarial heaven.

<font size=-1>[ This Message was edited by: Grim on 2001-10-25 17:43 ]</font>

[Ling]

Andy, how nice to near from you. Hope you're in good health. Spice up this forum, will ya!

[Andy Lang]

Ling:

Good to see you again, so to speak.

I met many of your relatives recently. Jeez, there are almost more of them than dollars in the SS Trust Fund. With a one child per family policy (but you can have 2 if the first is female), what a SS problem they are going to have.

***

Ok--shall we play, What's wrong with this picture!!??

When I was a little boy in kindergarten (do they still have those?), we had the game, What's wrong with this picture--and I always aced the tests.

Like SOA exams they had time limits and a 'nothing is wrong with this picture', response.

One day in my rush, I missed one.

It was a table set at an angle, so that the 4th leg was a really short one, and in my zeal to go out and play dodge ball in the sunshine (The start of my brillaint athletic career)and hit the little girls with the big ball (The start of that little hidden pleasure---ooooh!), I got the test back the next day and to my mortification I had MISSED IT!

So I vowed never to miss another game of what's wrong with this picture--and I never have. (except maybe once when I didnt look on the other side of the last page of Part 7 until 20 seconds to go, after embellishing all my other answers for a half hour), and blew a 20 point problem and failed the d*mn thing.

Anyway, here is your big chance to show you know how to pass this marvelous game, and maybe avoid getting hit by that big rubber ball.

So here it is.

The benefits of the SS system are weaker than those in the average DB plan in private industry.

SS is a DB pension plan and it has about 1.3 trillion dollars in assets, and covers almost everyone in the country.

The whole private DB system together covers only one in three American workers, but has about 4 trillion in assets.

WHAT'S WRONG WITH THIS PICTURE?

[Andy Lang]

Speaking of China, here is another question.

The Chinese policy is to have only one child, unless the first is female and then you are permitted one more.

Question: How will this affect the male-female ratio?

[Caffeine Junkie]

"What's wrong with this picture?"

Let me guess - one leg of a three-legged stool is too short? Or does it depend on your point of view?

Actually, it's a trick since three points determine a plane the stool cannot have a short leg, just an unlevel seat.

What do I win?!?!

[Patience]

Heeee's Baaaack

The male / female ratio stays even (assuming it was even to start with).

[Matoro]

On 2001-10-25 20:50, Andy Lang wrote:
SS is a DB pension plan and it has about 1.3 trillion dollars in assets, and covers almost everyone in the country.


What assets does SS own?

[M.]

I believe Patience is correct, mathematically speaking. However, I wonder if other factors need to be taken into account. For instance, gender of the child is determined by the father. Some men apparently produce more male than female sperm, and vice versa. So, if a couple's first child is a girl, they're probably a little more than 50% likely to have another girl.
OTOH, couples who are absolutely determined to have a boy may still "expose" their female children after the first (as happened in the past) until they have a boy. This, of course, would skew the population to include more males.

[G. Ringo]

Are there any population statistics on correlation between genders of first and second children?

While it is not possible for a man to produce unequal numbers of male and female sperm, a small positive correlation is a reasonable conjecture because of environmental factors affecting which sperm is likely to be successful.

[The Mister]

On 2001-10-25 20:52, Andy Lang wrote:
The Chinese policy is to have only one child, unless the first is female and then you are permitted one more.
Question: How will this affect the male-female ratio?<font size=2>As others have posted, 50/50 males and females. However, this assumes that all families with a female child opt to have a second child.

Wait... that doesn't change the distributions either. Never mind. :razz:

[Ranger]

While you are correct the the sperm is either the X or Y Chromosone, recent research has raised the issue, that perhaps it is the female egg which actually determines the sex of the child, rather than the male sperm.

The ovum does this by only being receptive to either the X or Y Chromosone, but not both. Some eggs only want X sperm, others only Y.

I'm sorry - are we guilty of thread drift - or just "knowing our history"??


<font size=-1>[ This Message was edited by: Ranger on 2001-10-26 13:33 ]</font>

[dbragg]

Cecil Nesbit - U. of Michigan - educated a great many actuaries.

Ed Lew

[Indep]

Don't worry Andy, all the people that are too cheap to pay taxes now will just condem their children to paying 25% of thier pay towards an ailing SS system. At least they will have the immediate gratification that they desire, though. (Some can even make reasonable arguements for it.)

[Andy Lang]

The two actuaries were George Buck and Meyer Melnikoff. Buck died a long time ago--Meyer very recently.

I had ongoing phone conversations with Meyer on the sad state of affairs with respect to Social Security and Medicare, and their counterparts in the private sector--defined benefit pension plans and retiree medical--when, in a call to him, I found out from his son that he had just passed away.

I am writing an article on Meyer for Contingencies Magazine, but wil lalso include Buck.

Briefly, Buck adapted actuarial techniques from the level premium whole life insurance industry to develop actuarial cost methods used in the actuarial advance funding of defined benefit pension plans and formed the very first actuarial consulting firm--way back in the early part of the 20th century.

Meyer was instrumental in the late 1950s in saying and helping show that stock investing was essential for any decent level of benefits in DB plans and also was ideally suited for the long term nature of such systems too. (few people know that, Meyer being more well-known for his developmnet of a mutual fund for real estate while at the Pru--PRISA for institutional investors--even though the real estate market collapsed later on. )

The investments in the DB industry, especially the stock investing, have been the most important driving force in the huge growth of the U.S. economy for more than 40 years.

DB investing along with other institutional investing--college and university endowment funds, foundations and to a lesser extant, Mutual funds--is the side of investing that often brakes market bubbles and buys when markets are low, helping stabilize markets (not always however)--wereas most individual investors are exactly the opposite and all too often wind up taken to the cleaners.

The former are generally value oriented (the good ones anyway),while the latter are generally momentum oriented and as such arer are the 'marks' or if you prefer--the suckers who Wall Street goes after bigtime.

The former have low fees and transaction costs while the latter have fees that are from 10 to 200 times as high--which largely accounts for why so much money has corrupted congress--the House far more than the Senate--and this administration in pushing DC plans over DB plans and why there is this phony committee set up by Bush to privatize SS.

Watching these guys try and privatize SS after the dotcom collapse and the severe stock market downturn is amusing, if it wasn't so tragic.


Moynihan recently decided to bag the Committee's work for a few months, using the war on terrorism as the excuse.

Patrick, Patrick, Patrick! What a way to kill a long and pretty good public career. What would your mom think? What would FDR think?

One last thing.

There is one more actuary who will become so famous in the future that his fame will be known far and wide not just here but internationally.

And with good reason. Hell, what other person knows how to fix the Big Four---SS, Medicare, DB pension plans and retiree medical--and by so doing also help--as a byproduct no less--things like constraining global capitalism--hey if democracy is so hot for nations why dont we have any of it in corporations--while, at the same time allowing the ecomomic pie to grow more efficiently, if a bit slower, closing the ever widening gap between the rich and connected and everyone else, protecting the environment and the planet--hey, it is still the only one we have---and even helping remove the breeding ground of nice folks like Osama Bin Laden and the Taliban.

Wassamatta?

You thought George Bush was gonna do that last thing. Hell, even if we succeed in killing Osama and the Taliban and all his nutty followers, if we don't get our national policies right, there will be far more terrorists at the end than the beginning.

Now you know he is sitting on an 85% approval rating right now--even as the economy is heading South like a Japanese bullet train.

On that point, here is what CW says in today's Newsweek (CW=Conventional Wisdom:

Arrows sideways for Bush: '
Still Teflon on the war, but soon to be Velcro on the economy.'

It's STILL the economy stupid! Ask The Ragin'
Cajun or even Daddy Bush. They know.

On that last tax cut--the one for IBM and GE, etc---why did you bring Robert Rubin to Shanghai if you were going to ignore his advice?

Listen to my advice and you might well have a shot at election in 2004--without resorting to Florida tactics.

You might not have your Bro there you know. I hear tell there is a tall tough gal who wears a blue dress who has her sights set on Bro' Jeb.

All those old people in Florida and all
those blacks and Jews who were disenfranchised there are all coming out in full force for the next one. I think the demographics say they outnumber the rightwing rednecks in Northern Florida and the right-wing Cubans in the Miami area--the crazy ones who wanted that little boy.

[Andy Lang]

re China, Patience is right, provided the births are 50/50 and there are no other mitigating factors.

But what accounts for the 55% male-45% female split in the recent decade then? (arent sure of that is correct, but it is in the ballpark I think.)

Well---there is a slight predisposition to have more males born than females, but it is too small to account for that ratio. (More male births than females is probably genetic as males die in battle too much, along with heart attacks and other other strenous and dangerous activities, like killing Woolly Mammoths.)

The answer?

95% of the people still live in the country and a proportion of them still practice infanticide--killing the first born if it is female, despite the government efforts to stop it.

Ignoring the more males born thing--what proportion of the total population still practices this to account for the 55/45 split--after ten years?

[Andy Lang]

BTW, there is a third actuary who is more important than both Buck and Melnikoff.

Can you name him and what he (or she)said and why it is so important?

[Steve White]

That actuary is you, Andy, but I'm not sure exactly which of your words of wisdom is the key one.

Or perhaps your importance is yet to come, when people start heeding your advice on social security and DB plans.

[Patience]

Andy: post the answer in the SOA, they are waiting Patiently.

didn't you once criticize a month delay to getting a response?

[CJL]

Regarding the slightly higher male birth rate:

I thought that was offset by higher infant mortality rates in males, so that once you got beyond age 2 there were slightly more females than males.

[Laffit Pincay, Jr.]

A factoid popped up on my tv last weekend on one of the news channels: "There are currently 100 million more men than women in China."

That is pretty significant even for a country of 1 billion. I don't see this evening out very soon. They attributed it to selective birthing or some short catch line, no mention of female infanticide, exposure or anything else in the short factoid.

It reminded me of this thread which just came back to the top today. A very slow day on the forums.

[Anonymous]

I wish someone was history.
I promise to appreciate him more then.
(Lucky me, it's not a stretch.)

[Intents]

To what extent will the males in China go to find mates? choices: a)same sex preference increase b)male harems c)chemical obliteration of sex drive d)weekend trips to Bombay e)invade another country f)transcendance from the need of vertical/horizontal axis orientations

[Ms. Re]

to d. bragg:

Ed Lew??? wasn't he one of the folks recently implicated as being responsible for the race based pricing at one of the large NE mutual companies? If so, he belongs in the Actuarial Hall of Shame!

[Andy Lang]

re Ed Lew...yes he was the guy in the WSJ article about race-based pricing.

How quickly they fall.

Gotta get me up there fast!

[Anonymous]

Ms. Re

Should your name be dragged through the slime and mud in 50 years for horrible things we all do today, for example, but certainly not limited to, 1) age based pricing and 2) letting children die of starvation all over the world.

Age based pricing, sex based pricing and race based pricing all have a sound actuarial basis. Limitations and prohibitions on their use are based on other considerations. Moral acceptability depends on your values. Some would argue that charging old people more for insurance (even though they cost more) should be a crime.

[Double High C]

On 2001-12-02 18:55, Peter Hendee wrote:
Age based pricing, sex based pricing and race based pricing all have a sound actuarial basis.


To revive this debate, one of these (3) things is not like the others.

The first 2 are things that clearly have a causal relationship with higher mortality. The last one does not - at least not clearly and profoundly.

Furthermore, if you were to set up an underwriting process in which you gathered a fair amount of info on the applicant (including personal history and family history) and left out age, you would certainly be losing a great deal of accuracy in assessing the individual risk. The same is true, but to a lesser extent, with sex. With race, however, much if not all of the environmentally-caused differences (e.g. due to poor diet, less medical care) can be gotten from the underwriting process, and some easily identifiable genetic causes (e.g. sickle cell anemia).

It is fine if aggregate rates (after underwriting) turn out to be higher for one race than another (due to e.g. a higher percent of one race being nonpreferred, in a fair underwriting process).

OTOH, what would have been unfair, and likely did happen, is that something like the following:

The typical agent would push to sell to the moderately overweight person, and the company would have a complex scheme of credits and debits in which e.g. no family cancer could offset the excess weight, while blackness was treated as a condition that created a different table (and little or no hope of "standard"-level rates), even for a very physically fit black person. Companies were not interested in selling to them, so their "risk factor" may even have been so highly loaded to protect against any "unanticipated" risk, or something like that. (Whether or not this was done, it seems highly likely that if blacks had had the health / longevity profile, but had higher overall purchasing power or seen as higher class, the companies would have studied "black mortality" and its causes to see if there was a way that a more refined risk classification system could be created to offer many of them more reasonably priced insurance.)

(The actuarial / industrywide official "PC" line of the time probably was that there was not enough data, so it was too risky to do otherwise. Of course, there was also little female data.)

In today's world, the issue is largely moot due to the imminent extinction of people who are purely of one race (or who really know their racial composition with any degree of accuracy). IMO, this is a very good thing.

[Anonymous]

Would you argue that no risk classification factor should be used as a surrogate for a causal factor or would you only prohibit the use of those factors that are politically incorrect at the time?

[Double High C]

PH,

Neither.

We only get to the latter of your alternatives if and only if we know that (1) a certain (potential) "surrogate" factor is extremely highly correlated with the higher mortality, and (2) the combination of that surrogate factor with the underwriting data is significantly more correlated with mortality than the data alone.

If all of that were true, then you would get to the point that you would have to take public policy / interests into account (which you casually label under the heading of "political correctness"); I will leave this as an exercise for whoever wants to exercise.

One thing I will say is that if the public policy prohibitions that we have in effect now had never been put into place, one can at least make a good case that a limited amount of insurance would be available to blacks, as (e.g. the average) cost differentials would likely be in excess of the average mortality differentials (likely due to the very small number of serious competitors that would emerge in this market). I know that "in a perfect capitalist marketplace" (which would entail reaching an unattainable equilibrium involving unattainable goals such as "perfect information"), the prices costs would tend to the fair actuarial basis of the costs, but there is such an interrelationship between variables, among other things, that such an equilibrium could never be attained. Again, this is all beside the main point of my post here.

[Andy Lang]

Peter:

[Age based pricing, sex based pricing and race based pricing all have a sound actuarial basis. Limitations and prohibitions on their use are based on other considerations. Moral acceptability depends on your values. Some would argue that charging old people more for insurance (even though they cost more) should be a crime.]

Mixing age-based with the last two is absurd.

Sex based and race based pricing in life insurance and medical and auto is a tiny issue so long as everyone does unisex and non-race based--it becomes a problem only when laws do not mandate unisex and no distinctions by race.

The differnce in both race and sex is and was always small--and after they were mandated--so long as the indutry obeyed the law that is--there were zero problems for the insurance industry.

Age based pricing of life and health insurance is another deal entirely. unlike the other two, these diferences are tremendous. Check em out yourself--you are supposedly an actuary who knows something about these differences and can compare them weith the other two.

Knee-jerk reactions by the insurance industry and ideologues and fundamentalists who cant make important distinctions such as I just made have been endemic, unfortunately, and I haven't even gotten into the fact that race based pricing was both racist AND ILLEGAL.

As I have said for a long time, the insurance industry would have been better off a long time ago if it had been regulated by the Federal government and not by the states--and so would the public by a mile.

BTW, thjere are some major insurers who want federal laws to regulate the insurance industry--in part becaue these compoanies want to do international business and in part because the industry is getting eaten alife by others in the financial service industry and also want to become stock companies.

Dealing with all the states who have cracked down in many cases is a pain.

Beware, however, of the insurance industry clout in Congress and their attempts to subvert laws there--just as they did in many states for the 20th century, in their divide and conquer strategy.

[Steve White]

Grouping age-based pricing and sex-based pricing together is not absurd. Few if any actuaries believe the sex-based mortality differences do not exist, or that they are attributable to some other variable.

The only difference between age-based rating and sex-based rating is that the sex-based differences are small enough that it is not outrageous to let public policy considerations outweigh individual equity / free market considerations.

[Laocoön]

Being progressively more permissive about discrimination based on race/sex/age makes a certain amount of sense in our society. A lot of well-being is transmitted by parentage, as is race, so allowing discrimination by race would tend to lock entire lines of people wherever they happen to be. Individuals are stuck with whatever sex they are, but everyone descends from both sexes, so sex discrimination does not compound over generations as race discrimination does. And every individual either was or can hope to be each age, so age discrimination doesn't particularly favor certain individuals over others, as sex and race discrimination do.

[Weatherman]

On 2001-12-06 17:39, Laocoön wrote:
...but everyone descends from both sexes, so sex discrimination does not compound over generations as race discrimination does.

Unless people tend to model their behavior on their same sex parent/relative/role models.

[Laocoön]

Unless people tend to model their behavior on their same sex parent/relative/role models.


...which is their own decision.

[Brad Spirrison]

Race based factors can be implicitly created within area factors, if they are defined precisely enough (say by zip code).

[Chuck]

As others have pointed out already, race and sex based pricing differs from age in that, with a few notable exceptions (eg Steve Martin being born a poor black child and then deciding to become white), you only are a member of one race or sex in a lifetime. That to me seems to be the reason one should more acceptable than the other.

But the problem of course is that the laws can require unisex, unirace rates and still clever insurance companies can find other ways to charge what they want to charge. For example, with unisex rates, the standard risk age-weight table for someone 6'2", could be set between 168 and 170 pounds, thereby making most 6'2" individuals rated. (Is it okay to discriminate against fat people?) Also, discrimination can occur in the industry without it occurring within a company, based on where companies put their offices, the agents that they hire, etc, etc.
In my opinion, it almost always boils down to this. The "don't do this" regulations while well intended, don't work. If you think a sex or a race is being discriminated against, you need to find a way to make insuring those sexes or races more profitable. And you need to improve the accessibility of competitive information to the consumer. If you can figure out a way to do those things, then competition will take care of the discrimination.

Chuck

[Laocoön]

I completely agree. If there are economic reasons not to do business with person with characteristic X, then it is not very satisfactory for the government to say, "Thou shalt ignore characteristic X in deciding with whom to do business." It creates a strong incentive for cheating. Ideally, if the government really believes that people with characteristic X should not be discriminated against, then government should bear the cost of not discriminating against them, as in compensating those who accept their business in an amount that exactly offsets the additional cost of doing so.

[Anonymous]

Hey BP:

>>We get to the latter of your alternatives if and only if we know that (1) a "surrogate" factor is extremely highly correlated with the higher mortality, and (2) the combination of that surrogate factor with the underwriting data is significantly more correlated with mortality than the data alone.<<

If a surrogate factor can be obtained at almost no cost while other info is more expensive then using the surrogate factor can be cheaper overall - at least until the class action lawyers rewrite the law retroactively.

[Double High C]

On 2001-12-11 22:20, Peter Hendee wrote:
Hey BP:

>>We get to the latter of your alternatives if and only if we know that (1) a "surrogate" factor is extremely highly correlated with the higher mortality, and (2) the combination of that surrogate factor with the underwriting data is significantly more correlated with mortality than the data alone.<<

If a surrogate factor can be obtained at almost no cost while other info is more expensive then using the surrogate factor can be cheaper overall - at least until the class action lawyers rewrite the law retroactively.



Of course, your statement in your last paragraph is tautologous. Regardless, I contend that it is largely irrelevant.

As I see it, there are basically 2 categories of business (at least today):

1. Fully Underwritten Business

2. Business with (simplified or) no underwriting


You seem to ignore #1 in your post; otherwise, the other info would already be gathered.

Regarding #2, it is clearly problematic (at best) to call business "nonunderwritten" and then underwrite (and charge for it) by race. Regarding business with simplified underwriting, choosing to ask about race and not any questions other than smoking status and 1 or 2 others is highly problematic and I contend that it is unduly prejucidial. If you decide to ask e.g. 10 questions that are highly relevant to a person's history, then arguably you would not gain any appreciable accuracy in your assessment by inclusion of race. (Furthermore, how do you define e.g. black/Negro? white/Caucasian? do you apply the 1 drop rule, or come up with a complex matrix?)

And yes, then there are ethical considerations of a public policy nature, and a company that chooses to racially underwrite would deserve public scrutiny.

[Andy Lang]

Steve:

[The only difference between age-based rating and sex-based rating is that the sex-based differences are small enough that it is not outrageous to let public policy considerations outweigh individual equity / free market considerations.]

Size counts.

The ability to be able to tell which of a list of seemingly similar things is more important is--well, very important.

You are also ignoring complety that after sex-based pricing became mandatory, and was enforced everywhere, the Sky Will Fall If We Do This, actuaries and insurance industry were proven wrong.

This, I hasten to add, might not be the case if foreign insurers were let in, who were not under our legislative domain.

Which of course illustrates some of the problems with unfettered global capitalism. The US steel industry has been decimated because of dumping of steel by foreign countries (who overproduced vast qualtitiies of the stuff.).

So have American workers when US Multi-nationals are allowed to go overseas and use (and often abuse)cheap labor and currupt regimes. When you let a relatively clean fresh water lake of US labor into a much larger saltwater sea, or one polluted, you do not get a fresh water lake, but a salt water lake that is polluted.

For nearly two decades now the average real wage increase in American have been zero or even negative.

The point here is that when you have laws with teeth that apply to everyone, little things that otherwise in a 'free market', are true problems, because of anti-selection in this case, dissapear.

Am I becoming clear?

Ditto for the garbage industry in the NY Metropolitan area.

Ditto for the removal of toxic wastes across America, if the rules for individual states are not identical--which is to say federal law should, trump.

Ditto for education and the teaching of evolution as opposed to say, home schooling, and the phony alternatives to evolution like all thwe various forms of nonsense coming from fundamentalist Christians.

Ditto for pension laws.

Ditto for security laws.

Ditto for accounting GAAP rules.

Ditto for insurance actuaries rules.

Ditto for pension actauries rules.

Ditto for unrestrained global capitalism.

Sometimes retraints can actually make you free.

The trick is to get the restaints just right, not suffocating, but not eliminate them completely and thus buy into the false theology of the Free Marketers, whose principal center is located in the Chicago School of Business, with another center in Wharton.

[The Mister]

Ditto for education and the teaching of evolution as opposed to say, home schooling...Dammit, Andy, do you have any idea how to listen or read? Please read (I would say re-read, but you obviously missed it the first time) what I originally posted in response to your homeschooling jab in the "Two Heroes in Philly News" thread on December 7:

Andy, I know this is pretty much public knowledge, but for a (supposed) genius you sure do say some moronic things. (Pope=Catholic?)

Homeschooling is a growing movement not just among the Christian Right. Just because Bob Jones University Press is a publisher of some home-schooling curricula doesn't mean every homeschooler is a member of "God's Army".

Here are a few links:
Day 1 (http://search.npr.org/cf/cmn/cmnpd01fm.cfm?PrgDate=02%2F26%2F2001&PrgID=2)
Day 2 (http://search.npr.org/cf/cmn/cmnpd01fm.cfm?PrgDate=02%2F27%2F2001&PrgID=2)
Day 3 (http://search.npr.org/cf/cmn/cmnpd01fm.cfm?PrgDate=02%2F28%2F2001&PrgID=2)

For each link, page down (or do a word search) to the part about Homeschooling and listen to the reports.

Hey, LIBERAL NPR gives homeschooling a thumbs-up in three parts!

So watch it, Andy. If you continue to throw darts in your condition, you're likely to miss a few times.

[Polly Nomial]

Perhaps I missed it (I just read through this thread for the first time) and/or I am way off base, but no one has mentioned the selection issues.

Presumably, the perceived need for life insurance is the same for men and women, blacks and whites, but not so for young and old. Twenty year olds generally purchase life insurance at a much lower frequency than 50 year olds. The elimination of age based rating would lower that frequency even more. So not only do you have young insureds subsidizing older insureds, but you have laid the basis for a rate spiral. I don't see that happening with gender or race.

[Andy Lang]

Polly:

[The elimination of age based rating would lower that frequency even more. So not only do you have young insureds subsidizing older insureds, but you have laid the basis for a rate spiral. I don't see that happening with gender or race.]

The arguement, at least by me, is not over age-based pricing of life or health insurance. It whether or not anti-selection can even happen in sex-based pricing--which is relatively moderate, in a case where the rules of law eliminate it's use, and outsiders who do not have to follow these laws are non-existant--as in the case of individual life insurance. When was the last time you considered buying any from a foreign insurer not subject to unisex rates?

The answer is that the anti-selection is not there. So the potential problem dissapears.

[Andy Lang]

Most of the home-schoolers I have met were lousy students when they were young, and pretty dumb when they became old.

Besides the economic advantages of having you guys work are very high.

Hey, who else is gonna empty my garbage?

[Mr. Grim]

Andy, how can I get a job with you, I want to learn from the best? I would make a great apprentice. With your condition it is hard to know how long you will be around and you need somebody to carry the torch.

[Mr. Grim]

Andy, how can I get a job with you, I want to learn from the best? I would make a great apprentice. With your condition it is hard to know how long you will be around and you need somebody to carry the torch.

Rant, Rant, Cash balance plans, Rant Rant, Mormons, Rant Rant, Republicans, Am I off to a good start?

[Polly Nomial]

Andy, I'm confused.

I thought I said that <u>only</u> age-based rating would cause anti-selection. I agree that anti-selection in gender-based rating is virtually non-existant.

Was I not clear or did I misunderstand your response?

[Andy Lang]

Polly---sorry, misunderstood..

[Andy Lang]

Grim:

[Andy, how can I get a job with you, I want to learn from the best?]

Many have tried, but few have been chosen--and I'm actually serious about both.

Sorry, but you have not been chosen.

[mackinac44]

Get with it, Andy, because current issues are passing you by.

What's the point in arguing about the merits of fine tuning the rating by age, sex, or race even while the P&C industry is going crazy?

Aren't you aware that commercial lines prices are going up 50% this year? At this rate, the industry will recover all of its September 11 losses in six months or less.

Don't you know that insurers and reinsurers are deleting coverage for terrorist attacks as fast as they can?

Haven't you heard that the insurance industry and the reinsurers are looking for a federal bailout?

Don't you know that the biggest writer of medical malpractice insurance has just abandoned the business? Who's going to insure my doctor next year? Doctors who don't have insurance don't see patients.

Who's going to deal with these outrages if not you?

[Andy Lang]

My community's liabity premium just quadrupled.

Most all of that increase occured because of the terrorists. Some of it because of the effects of bad weather--due to global warmoing due to us; some of it due to the failure of Reliance--the largest insurance failure of all time.

Look in last Suday's magazine section of the Philly Inquirer and download the full story done by Joe DiStefano--a great investigative journalist and a friend of mine.

Its the story of Saul Steinberg and it shineth and stinketh like a dead fish in the moonlight, or like Enron's Kenneth Lay and his connections with George Bush and the top leadership of Republican conservatists.

[mackinac44]

If your insurer told your association that the increase was due to the terrorist attack, they're just feeding them a line. The terrorist attack might be responsible for a 5% rate increase. And, the increase should be for property coverages, not liability. What's going on is that insurers are taking advantage of the current situation to make enormous profits.

See: http://www.casact.org/students/forums/noncgi/Forum14/HTML/003001.html

What's amazing is that P&C actuaries find nothing wrong with this.

<font size=-1>[ This Message was edited by: mackinac44 on 2001-12-27 22:01 ]</font>

[Intents]

I thought the utility function prevalent is a driving force of availability of insurance company profits. I thought people had been moving toward expected loss as premium willing to pay, and now they are willing to pay more than expected loss. This is a good time to shore up some reserves and make the insurance companies look like a better long term investment after years of softness. If you are saying that there are also barriers to entry which are making the market less competitive then I agree unconscionable behavior needs to be considered as a possibility.

[atomic]

It affected that really badlly. The ratio has been heavily skewed.

Whoa. You just revived a 6-year old thread. This Andy Lang guy--I'd like to meet him. :tup: