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  #1  
Old 12-30-2016, 01:13 PM
Latitude30 Latitude30 is offline
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Default Comprehensive Diversity Training in Actuarial Science

When we think of diversity training, particularly when it comes to race and ethnicity, I find that whether it's a behavioral course for general business, annual employer-sponsored, or ethics-based, the objectives are generally quite congruent with slight variations being self-study vs open group discussion vs small teams vs lecture hall. The message is about people, respecting cultural differences and character, tolerance and synergy building.

But when a colleague found me this Actuarial Science-specific faculty research dissertation on actual injustices on race and risk determinations in our own line of work ...as Actuaries and specifically our process of assumption-setting, it made me ponder there is a much deeper and comprehensive learning we can put on diversity training that could be part of even an exam curriculum and require much deeper study than the current status quo. Only this time, a learning that would not take merely 20 minutes or so to get any kind of certificate of completion.

Has anyone seen this University of Minnesota to Faculty submitted Dissertation on Actuarial Work and historical racial bias, the wealth vs income gap, past racial bias in Risk Management and how we can better our future work by learning from our own field's past flaws?

http://conservancy.umn.edu/bitstream...pdf?sequence=1

I understand this dissertation is long and drawn out, but to hit on a few key points, often times in the past when using statistics to select mortality rates, morbidity rates, selection risk by group and area, the impact of seemingly sound assumptions led to factual and/or appearances of racial discriminatory pricing that had a number of effects

1) exacerbated income inequalities on racial lines through price model decisions

2) Created biases about insurability of groups based on risk and race being intertwined

3) The lack of consideration given to risk mitigating strategies tied to bettering socioeconomic conditions that otherwise perpetuate racial inequality and the potential risk offsets priced into actuarial models.

4) Actuarial studies being used by other racially biased sources to justify perpetuating racial discrimination

And so a study course I would propose is how to address this past, and then evolve our own profession into a more conscious of racial discrimination set of thinkers and doers, making our profession look more and more good and do more and more good.

Last edited by Latitude30; 12-30-2016 at 01:34 PM..
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  #2  
Old 12-30-2016, 01:31 PM
Abelian Grape Abelian Grape is offline
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So you're saying that the bamboo ceiling does exist!
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Old 12-30-2016, 01:36 PM
tommie frazier tommie frazier is offline
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167 pages? Piled higher and deeper indeed.

tl;dr
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Old 12-30-2016, 01:42 PM
Latitude30 Latitude30 is offline
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I think there isn't a perfect way to quantify actuarially sound risks that are by all subjective opinions, proof of all inherent interpretations of racial bias, but the study of the topic itself can help actuaries of the future avoid racial overtones wherever it is not difficult to do so in performing our work and I think that's the message.
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Old 12-30-2016, 01:58 PM
clarinetist clarinetist is offline
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Bias of racial groups isn't a new phenomenon, as the dissertation shows - and this has also gotten the attention of some data scientists as well - Cathy O'Neil's Weapons of Math Destruction is a good example, and Witten's text on Data Mining (the latest edition) discusses these issues briefly as well.
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Old 12-30-2016, 02:03 PM
clarinetist clarinetist is offline
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Quote:
Originally Posted by Latitude30 View Post
And so a study course I would propose is how to address this past, and then evolve our own profession into a more conscious of racial discrimination set of thinkers and doers, making our profession look more and more good and do more and more good.
Good luck getting corporate support behind that.
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Old 12-30-2016, 03:08 PM
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Just an observation - most of the talk in favor of diversity emphasizes the good aspects of minority groups. But what happens if the data mining results show the opposite? Will the proponents of diversity argue against what they didn't expect to see?
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Old 12-30-2016, 03:10 PM
Latitude30 Latitude30 is offline
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Good luck getting corporate support behind that.
Corporate objectives are aligned with longterm profitability, growth and stability, and keeping market share. To the extent diversity focus improves any one of these where benefits outweigh additional costs, they are on board.

Longterm profitability aligns with marketability that exceeds the cost of a company's assets owned and borrowed. How much would one pay to purchase the company in Whole or in part, or a company's equipment. That is all based on demand for a company's equity in excess of traceable costs and that untraceable piece being called "goodwill".

Goodwill is the magic catalyst here. It's that brand perception of a corporation that makes people believe it will be worth more in the future either because of employee morale, conscientious product development, corporate social responsibility, happy customers, happy employees, etc. Diversity enhancement falls under the Corporate Social Responsibility piece and it is communicated through the Headlines of their quarterly statements.

The perception of corporate America being an evil stems from a belief that traditional corporate enterprises are more cost, time and resource conscious than they are willing to progress their brand and products to a new level, even when benefits can outweigh costs. However, experience now shows that in a fast-changing global world, you cannot remain sustainable without continuous improvement from within. You have more to lose staying on the sidelines. CEOs and CFOs who have been successful tend not only to agree with this, but they love to focus on it at every opportunity.

Last edited by Latitude30; 12-30-2016 at 03:17 PM..
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  #9  
Old 12-30-2016, 03:14 PM
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Quote:
Originally Posted by Latitude30 View Post
Corporate objectives are aligned with longterm profitability, growth and stability, and keeping market share. To the extent diversity focus improves any one of these where benefits outweigh additional costs, they are on board.
Reiterating my prior questions. What if they DON'T?
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Pluto is no longer a planet and I am no longer an actuary. Please take my opinions as non-actuarial.


My latest favorite quotes, updated Aug 15, 2017.

Spoiler:
I should keep these four permanently.
Quote:
Originally Posted by rekrap View Post
JMO is right
Quote:
Originally Posted by campbell View Post
I agree with JMO.
Quote:
Originally Posted by Westley View Post
And def agree w/ JMO.
Quote:
Originally Posted by MG View Post
This. And everything else JMO wrote.
MORE:
Quote:
Originally Posted by Woodrow View Post
Complementing your technical skills with social skills - whatever they are - will help your career. This is not a sign that the world is unjust.
Quote:
Originally Posted by Bro View Post
I recommend you get perspective.
Quote:
Originally Posted by Enough Exams Already View Post
Dude, you can't fail a personality test. It just isn't that kind of test.
Quote:
Originally Posted by Locrian View Post
I'm disappointed I don't get to do both.
Quote:
Originally Posted by PeppermintPatty View Post
It's SO much better to work for a good manager.
Quote:
Originally Posted by Patience View Post
slow down
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  #10  
Old 12-30-2016, 06:09 PM
nonlnear nonlnear is offline
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Quote:
Originally Posted by Latitude30 View Post
Corporate objectives are aligned with longterm profitability, growth and stability, and keeping market share. To the extent diversity focus improves any one of these where benefits outweigh additional costs, they are on board.

Longterm profitability aligns with marketability that exceeds the cost of a company's assets owned and borrowed. How much would one pay to purchase the company in Whole or in part, or a company's equipment. That is all based on demand for a company's equity in excess of traceable costs and that untraceable piece being called "goodwill".

Goodwill is the magic catalyst here. It's that brand perception of a corporation that makes people believe it will be worth more in the future either because of employee morale, conscientious product development, corporate social responsibility, happy customers, happy employees, etc. Diversity enhancement falls under the Corporate Social Responsibility piece and it is communicated through the Headlines of their quarterly statements.

The perception of corporate America being an evil stems from a belief that traditional corporate enterprises are more cost, time and resource conscious than they are willing to progress their brand and products to a new level, even when benefits can outweigh costs. However, experience now shows that in a fast-changing global world, you cannot remain sustainable without continuous improvement from within. You have more to lose staying on the sidelines. CEOs and CFOs who have been successful tend not only to agree with this, but they love to focus on it at every opportunity.


In Italian, Goodwill is called “differenza di consolidamento”: it is a number (difference) that we must insert into the consolidated balance sheet in order to make it balance.
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