Posts

Traps baited with orphan

Image
Here is how Elizur Wright described whole-of-life insurance in 19th century’s America. He published his critical pamphlet in 1877 under the title ”Traps baited with orphan; or, What is the matter with life insurance” where he showed with actuarial arguments how the insurance companies were ripping off their policy-holders through exorbitant paid-up fees on whole-of-life business that basically annihilated the surrender value of the policies. Policy-holders trying to protect their families against adverse circumstances found themselves stuck if, for whatever reasons, they were unable to pay the premium. We are not talking here about risk business, as those policies had reserves calculated on the basis of whole-of-life, but those reserves were contractually stolen from the policy-holders. “Traps baited with orphan” is a pamphlet that is both technical and emotional. It appeals to reason and also to the compassion of readers who would hate to see orphans lose their entitlement because n
Post a Comment
Read more

The Poet-Actuary

Image
Poet-Actuary - This sounds like an oxymoron. You imagine a poet as an emo, an individual characterized by great passion, moved by words, in touch with their feelings. Then you think of an actuary as a Maths-nerd, a person of a few words, not the life of the party. You wouldn’t necessarily associate the words poet and actuary. They belong to two different worlds... or do they? Back again in the 80’s, as a schoolboy in a little French country town, I would have to learn the Fables of La Fontaine. Jean de La Fontaine was a story teller who used poetry to tell parables, or fables. He would come up with those unusual stories, such as the Frog and the Rat, starting with the statement: “They to bamboozle are inclined, Saith Merlin, who bamboozled are.” His stories involved random animals teaching humans a life lesson - Thy Shalt Not Bamboozle Thy Neighbour. There was always the “moral of the story”. One of his famous fables was the Tortoise and the Hare, one inspired by the Greek poet A
Post a Comment
Read more

From Comets and Spaceships to Annuities

Image
Until recently I only knew Edmond Halley as an astronomer and I still remember our school activity when his famous comet appeared in 1986. Back then, a schoolboy in France, I drew a picture of Halley’s Comet and imagined the world as it will be when the comet returns, that is in 2061. I have no recollection of what I thought the world would look like in 2061. I probably thought of a world with spaceships travelling to Mars and aliens living alongside humans. I am lucky enough to be one of those few people who will probably see the comet twice, provided my survival curve keeps up its rectangularisation. Halley himself didn’t have this opportunity, as he died before the comet returned. That was all I knew about Edmond Halley, until I read his revolutionary article on annuities. You can call me a nerd, but I was quite excited when I found free access to the 1693 article on the Royal Society’s website. It was like discovering the Dead Sea scrolls. I was reading arguably the oldest scientif
Post a Comment
Read more

The Actuary Song

Image
As I was browsing through ITunes, I came across the Actuary Song, taken from the musical “I Love You Because”. Well, I had no idea there was an actuary song, as you can imagine. It turned out there were actuary two others songs on ITunes about actuaries. But I will focus for the moment on the Actuary Song. The Actuary Song is about a girl Marcie who broke up with her boyfriend and her friend Diana gives her some advice about finding Mr Right. I have lived happily as an actuary now for a number of years and I had never heard actuarial principles were used on the dating scene. If only I had known this, maybe I could have applied some of my mathematical skills to assess the likelihood of certain relationships. So here is what I learnt from the Actuary Song... The Rebound Time (RT), that is the time (in years) you need before you start another long-term relationship, depends on the Relationship Length (RL) of the previous relationship. The first year is worth 6 months of RT, the next is
1 comment
Read more

Croc-insurance for Obama

I was reading this most random story about president Barack Obama receiving an insurance policy in the event of a crocodile attack as he travels to Darwin in the Northern Territories of Australia. President Barack Obama's family will receive a $50,000 benefit if the most powerful man on planet Earth gets eaten by crocodile. How comforting is this! The man is probably insured for millions in the event of death. But they will get an extra 50K for a crocodile attack. The article added that "the policy was designed to give Mr Obama's family peace of mind." An official said: "For Michelle and the kids they can be comforted if a terrible event did occur then $50,000 would be payed out by TIO to help support them." Here is my question: how do $50,000 give you peace of mind when you lose a husband? I don't know about you, but I would have peace of mind up until the moment some random insurance company tells me I could be eaten by a crocodile. Then I would th
Post a Comment
Read more

A Stressful World

Yesterday I spent the day helping my friend to set up a booth for a MasterChef expo down in Sydney. Her brother is a famous Chef at a local organic restaurant. As I was contemplating all the work that is involved with being a Chef – cooking, managing staff, judging competitions... I said casually “That must be quite stressful for your brother to do all that”. To which my friend replied: “It is stressful; I heard Chef and bricklayer are the 2 most stressful jobs.” Chef, I can totally see that it is a stressful job, especially if you’re not just cooking but also building a reputation, running a business as in the case of my friend’s brother, and trying to advance the culinary science with innovative recipes. But bricklayer?... Who would think being a bricklayer is a stressful job? Hard-working job, certainly. Physical job, absolutely. Stressful job? I’m not quite convinced. I still have the image that bricklayers are well-built guys with a nice tan, and they whistle at pretty girls w
Post a Comment
Read more

Where do I fit ?

There are 2 kinds of responses people have when they ask what I do as a living and I tell them I am an actuary…One response is “A what ?” The other response is “Wow, you must be smart.” Both responses are quite challenging. In both cases, I don’t know what to answer. To the first response, I answer something like “I make insurance products work.” I don’t know if that helps, but that’s the shortest I can come up with. To the second response, it’s even harder to find an answer. Am I smart? The reality is that you rarely feel smart when you’re sitting an actuarial exam. I would feel really good after a Maths exam in high school, but unfortunately I never had the same kind of inner confidence when I sat actuarial exams. I ‘felt’ smarter when I was in high school than when I was doing my exams to be an actuary. Am I smart? I am smart enough to know that being smart is not all there is in order to move forward in life. Sometimes you don’t need to be smart, you need to be assertive, or you
2 comments
Read more