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Actuarial Science Ranked As Most Valuable College Major (bloomberg.com)
According to a new report from Bankrate, actuarial science, the formal term for the study of insurance, was ranked the most valuable college major.
"The actuarial science profession is interesting because students don't need advanced degrees to gain livable wages, but instead are certified through a series of exams overseen by the industry's professional organizations," said Bankrate.com analyst Adrian Garcia in an interview. "Students typically pass one to two of these exams while in school and then go on and complete others while working, earning raises and bonuses as they pass." Bloomberg reports: Actuarial science majors earn an average annual salary of $108,658 and have a better-than-average unemployment rate at 2.3 percent. And at a time when student debt is at a record high, these graduates are less likely to incur the added expense of additional schooling and delayed earning potential. Less than 1 in 4 graduates pursue advanced degrees. The study ranked 162 majors with labor forces of at least 15,000 people based on average annual income, employment status and whether those graduates went on to pursue a higher degree within 12 months. Income accounted for 70 percent of the weighted ranking, unemployment for 20 percent and 10 percent was awarded to career paths that did not demand additional education. The data was derived from the U.S. Census Bureau's 2016 American Community Survey.
"The actuarial science profession is interesting because students don't need advanced degrees to gain livable wages, but instead are certified through a series of exams overseen by the industry's professional organizations," said Bankrate.com analyst Adrian Garcia in an interview. "Students typically pass one to two of these exams while in school and then go on and complete others while working, earning raises and bonuses as they pass." Bloomberg reports: Actuarial science majors earn an average annual salary of $108,658 and have a better-than-average unemployment rate at 2.3 percent. And at a time when student debt is at a record high, these graduates are less likely to incur the added expense of additional schooling and delayed earning potential. Less than 1 in 4 graduates pursue advanced degrees. The study ranked 162 majors with labor forces of at least 15,000 people based on average annual income, employment status and whether those graduates went on to pursue a higher degree within 12 months. Income accounted for 70 percent of the weighted ranking, unemployment for 20 percent and 10 percent was awarded to career paths that did not demand additional education. The data was derived from the U.S. Census Bureau's 2016 American Community Survey.
Insurance cunts scamming of the top again.
He can't stand actuarial studies, he keeps saying "never tell me the odds".
I read that as "actual science ranked most valuable college majors". I was prepared to see a few gender studies majors throw a hissy fit.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Useless for making the lives of humanity happier, since it also does nothing to prevent harm. Merely the profession of paying the parents of the child who fell into the well and died.
Only useful, if you consider making money... not even earning it ... for the sake of making money, to be useful. (It is not. It is circular reasoning. You still need an actual goal.)
Aside from the fact, that it is all about making *profit*. Aka taking more money than you gave back. Which somebody else will lack then; harming his life. Conveniently without having to call it stealing.
But maybe I'm just a nasty social person, who wants to treat people fairly, give back as much as I took, and pursue the apparently not valuable goal of improving everyone's life and getting off this rock some day... How "unamerican" and "unchristian" of me!
Will immediately flock to this profession thus increasing supply tenfold.
Objective achieved.
At the high school I work at, there's at least 3 kids that are like "I want to be an actuary". I guess because it's an easily accessible field for math nerds.
The first type of job that will go away once automation is a thing. Who need to speak with an insurance vendor when you can just have a machine do the same.
I clearly remember my mom telling me this multiple times in the early 90s. I wonder if the Internet boom made this false for a while or if this "new" report is just stating that something that's been true for twenty-plus years is still true.
My mom had no connection with the insurance industry, it was just commonly known career advice that if you were good at math then passing the series of actuarial exams was a sure route to a good paying job.
This bullshit started with economic science. Yes, there is economic science and that is actual science, but it's not taught as science at all and this "actuarial science" is no different. Calling it that is just an excuse to turn what should be trades into college studies.
Your logic makes no sense. No risk is reduced by that "product". Hurricanes do not magically fear insured buldings.
And generally, the whole point of that business seems to be, to have as many reasons to avoid paying for the damaged as possible, while deluding you in as many reasons to be afraid and believing they are your saviors as possible.
All you do, is lose the amount of money to "insurers", that you are in fear and how much you are a pussy, and they tell you to fuck off when you want to claim money for what you thought you were insured for.
Do I really need to repeat that it can not prevent anything?
Even if it was about you personally acting more carefully ... which it is not, since its whole point is that there are things that are outside of your control ... You could also just be more careful without just handing them money out of fear.
Actuaries are frequently employed by insurance industries; they are responsible for the tables that set the rates. The Affordable Care Act gave a very powerful industry - the for-profit insurance industry - even more power by making us all their obligate consumers. Naturally in their quest to enure maximum profitability they would want to hire more actuaries so they could make more tables to justify screwing over more consumers.
This is likely not a side-effect either, but rather an intended outcome of the original Heritage Foundation proposal.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
If you start now, by the time you actually complete a degree, AI will have taken your job. If ever there's a white-collar job that software can replace, it's data analysis.
Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
A math major, a computer scientist, and an accountant were asked how to add two plus two.
The math major says that two is the successor of one which is the successor of zero, therefore 2+2 is the fourth successor of zero, therefore the answer is four.
The computer scientist says that two is 2^0 or 10 in binary, and adding 10 to 10 is 100 in binary, which is equivalent to 4.
The accountant, when asked how to add two and two became quiet, looked around and whispered "what would you like it to be?"
....such a major, and the high income that comes with it, requires a proficiency at math and the ACTUAL proof of ability in objective, rigorous testing...a somewhat higher standard than the plethora of other liberal arts majors like Gender Studies and Medieval Russian Literature which qualify one to be little more than a barista. (And not even that, really.)
-Styopa
The actuarial science profession is interesting because students don't need advanced degrees to gain livable wages, but instead are certified through a series of exams overseen by the industry's professional organizations,"
Sure, if you consider MSc in applied math with the actuarial studies on the side as not an advanced degree..Well, at least you don't have to do a PhD yet, right? Good thing that you only need masters to gain livable wages now. The rest of us just might want to go die somewhere else. ~x)
The vast majority of insurance is voluntary and that's a good thing.
Not when it comes to health insurance. Voluntary insurance should be for things that are voluntary. Everyone is going to need health care at some point and the best way to ensure the best care for the most people is to require everyone to pay into the pot and spread the cost. If you are a bit better off then congrats but you get to pay a bit more to help those who lack the means so we can minimize cost overall.
Actuaries are simply gamblers who are smart enough to accurately calculate the odds.
Actuaries aren't really analogous to gamblers since none of their own money is at stake typically. They are simply the ones calculating the odds for the insurance companies who are analogous to gamblers or more properly to bookmakers. However all these analogies are really somewhat flawed.
The Affordable Care Act gave a very powerful industry - the for-profit insurance industry - even more power by making us all their obligate consumers.
As opposed to letting people suffer and die without insurance? We ALL are going to need health care and that means we all need insurance in some fashing. Only in the US are we too stupid and/or too uncaring to realize that we all have to share the financial burden. If you don't like for profit insurance companies reaping the benefits then you are de-facto arguing for single payer government health care. (unless you are an an asshole who thinks poor people don't deserve health care)
You are an "obligate consumer" of health care whether you want to be or not. The sooner we get out of denial about this fact and share the cost the better off we all will be.
All the baby boomers will be retired and outnumbering workers in 2030.
What the fuck is actuarial science? Why the hell didn't BeauHD include a single sentence in the summary to explain what it is?
I prefer to throw my waste dollars or shekels (do you take shekels? How 'bout zloty?) at Silvia Browne (I say borty. A fun thing to do when you're feeling sporty.) because she was more recently a prophet. Or at least that's what she seemed to claim.
Traditionally, it was used to predict when you'd die
Is it now being used to predict how you'll vote?
Yeah, it pays well and if you are good at math, it is easy, but actuarial science is in some sense the dullest, most boring and saddest field in applied math, since you usually do the additional certifications while you are already employed in an insurance company (similar to certifications for system administrators), which in turn means, that you probably hold a degree in math or physics. Here in Germany that usually means at least a MSc, but usually a PhD. And then you go back to undergraduate level statistics, which again is pretty much high school mathematics.
But it pays well, has almost 100% job guarantee and usually means very manageable work conditions with many benefits, which is everything you wish for after working in academia.
This does make sense. Not only does it lead potentially to a career in a well paid industry, high levels of numeracy - not just arithmetic, but having a good intuitive understanding of what calculations mean and how probability works - are very useful in a lot of areas.
There is this basic tenet of economic theory that says something well paying that doesnâ(TM)t require extraordinary skills must be exceptionally unpleasant in some way. Anyone who has ever worked with an actuary (I worked with a whole building of them) was well paid for their troubles.
I paid $240,000 for my house. I owe $200,000 on it.
Without insurance, if/when something happens to my house - hurricane, fire, etc, I'd have no place to live AND owe $200,000 paying for a house I no longer have. That would be catastrophic for my family.
It's insured for $400,000. If it's destroyed by a hurricane (or more likelly in my area, tornado or fire), I'll pay off the $200,000 I owe and then use the other $200,000 to buy another house with cash.
If a fire or tornado destroys my house, I'll still have an house and won't have a mortgage payment. I'm HOPING for a tornado. Insurance means it would be a windfall (haha) instead of a catastrophe.
> No risk is reduced by that "product".
Have you ever heard of Underwriters Laboratories (UL Listed, UL registered)? Or fire codes? Underwriters means insurers. The primary product safety organization was founded by insurance companies.
How about the National Fire Protection Association, which writes the fire codes? That's insurance companies again.
Ever heard car commercials bragging about their IIHS safety rating? IIHS is the Insurance Institute for Highway Safety. Again, the primary safety organization is insurance companies.
Honestly I've never even heard of this word before today.
Only the State obtains its revenue by coercion. - Murray Rothbard
Switched from a B.S. in computer science to actuarial science in the business school. Worst decision i probably every made except it did wonders for my gpa and I learned a lot of practicle knowledge about finance and insurance. After losing a year of science coursework i ended up with a BBA and 10 years of exams to pass. My first exam covered Calc I, II, III, linear algebra, differential equations, and sequence and series all of which I took as a CS major. That's been a long time and things have probably changed. Passing score was totally controlled by society of actuaries to limit the number of people in the field and how far you progess. After making it through that entry exam i had about 8 more to go from probability and statistics to numerical analysis to to specific insurance exams if you are doing the CAS track. After working for a property and casualty company and going to an actuarial convention in Chicago i decided doing loss ratio triangles and filing rate increases was just too dry for me. Went back to graduate school to get a master's in computing and doubled my salary after graduation. There is definitely a career available to those who want to go into the actuarial field but working for insurance companies might not be terrible exciting for many. One perk of being an actuary is potentially how close you work with the CFO and other executives. Most of the math you master isn't used in the job. If you make it to a fellow you can make multiple 6 figures but it takes a long time and is a pyramid in structure since the exam pass rate is a controlled thing. Some of the more interesting work i think is in the reinsurance and maritime insurance sectors. https://www.casact.org/admissions/process/
It's rare to have a business style degree based on calculus (mixing in linear algebra and operations research, OR was awesome!).
Calculus based statistics was hard (sophomore year). Life contingencies was much more difficult (senior year).
I moved into IT right after graduation. Not much calculus after that, but I always enjoyed it (until sin/cos came into the equation).
BlameBillCosby.com
And let's not forget the Actuarial Program from TRON.
Jeff Bridges was not impressed.
https://www.youtube.com/watch?...
BlameBillCosby.com
Shocking. You'd think there was some kind of pyramid scheme going on here. :rolleyes:
mnem
Oxygen is a gateway drug.
I studied Actuarial Mathematics at University, then completed professional qualifications over the course of 5 years, have been working in the profession for 12 years.
The article is quite balanced but doesn't really draw out a key point: The exams are extremely tough, and there is a high drop out rate (c.50%) prior to qualifying. I know people who have repeated the same exam 10+ times (over the course of 5 years), and have watched as their soul is slowly destroyed. If you don't qualify you will generally be looked down upon.
If you lose your home, the insurance company will only pay for replacement, no matter what you insured it for. You are a fool if you think you can get away with this, because it encourages insurance fraud. http://www.homeinsurance.org/q-and-a/1st-party-property/can-i-insure-my-house-for-more-than-its-worth/
I pointed out that insuring your home and its contents removed the risk of financial ruin due to a fire, tornado, etc. That's the proper use of insurance - preventing financial ruin by making a predictable small payment so you don't have to worry about losing $200,000.
The other insurance I carry is because I have a young child and I am the essentially the sole bread winner for our family. It only costs a couple hundred dollars per year for me to have a $250,000 life insurance policy to take care of my family if I die before I'm retired. Again, losing me without having insurance would be a financial catastrophe for my family. Insurance largely fixes that. (Wife has a plan to complete her degree while paying the bills with the first half of the insurance money).
A corollary is that you should NOT buy insurance on your $60 DVD player and other consumer items. A broken DVD player is not a catastrophe. It won't ruin you. Therefore rather than paying an extra $25-$50 every time you shop the electronics section, it is wiser to put that money in the bank. Then when the DVD player breaks you just buy a new one. It costs 75% that way, and you don't have to deal with filing a claim.
Twenty years ago you could be medical insurance in the US. It covered you for major medical expenses that would be catastrophic. A $35 doctor visit for strep throat isn't a major catastrophe, so insurance isn't relevant and wasn't involved. Medical insurance was fairly reasonably priced. In the last 20 years, people in the US, and our lawmakers, seem to have totally forgotten what insurance is. Insurance isn't for $35 items, that's what twenty dollar bills are for. But now we have insurance companies inserted into the process even for a $10 vaccine, so the doctor gets to pay a full-time claims person to handle paperwork and they wait a month or more to get their $10 for the vaccine. The insurance company has thousands of employees handling these tiny claims. All of those people and all of that process costs money. So now the insurance costs over twice as much and you STILL pay the doctor the $30, now they call it a co-pay. Now you ALSO get too pay the insurance company hundreds of dollars per month more and mostly you're paying for everyone's paperwork.
I wish I could still buy medical insurance, instead of a health plan. Medical insurance isn't that expensive and the claims hassle isn't that big of a deal for something you only deal with once or twice in your life. I've got $35 in the bank, so I can pay for a a strep test without also paying an insurance company an extra $35 to process the payment.
Even worse, now not only does the insurance company bureacracy have to get involved in every little medical thing, I'm also required to pay for crap that's rather questionable as to whether it's medical or not. The UK association of chiropractors, when organization which licenses chiropractors in the UK, says that the entire idea of "sublaxation" is bull, total snake oil, and that's what chiropractic is bases on in the US - snake oil. Yet I'm forced to pay for this snake oil, because lawmakers require insurance companies to include it. As I recall, one bill even listed aromatherapy (smelly candles) as something insurance companies (and therefore their customers) would be forced to pay for.
You want to fix medical costs in the US? That will require several different changes, but bringing back *medical insurance* as an alternative to *health plans* would certainly help.
The straw man argument, with a strawman of you *own* argument ... I interesting approach.
But just as obvious as a regular straw man.
Got any actual arguments to offer? From the real world? With a non-psychopathic mindset?
as Agricultural Science Ranked As Most Valuable College Major and I thought "good, those are the people who are good for humanity, those who help to feed us and can help those in the third world." Then I realised that it was Actuarial, which I'm surprised is even called a science. Yes: it helps understand risk, but that is not as useful as helping to grow crops.
Also valuable meant high earning for the graduate, not really useful for humanity. But I have to accept that those who are of most benefit to society are not those who are most rewarded: look at the difference in pay of a scientist and a stockbroker - only one really does much good for most of us.
I've long held the view that IT and SW development need to figure out a way to form a professional organization like the one physicians have. A "lite" example of this is the Society of Actuaries, and it looks like they're doing their job. Actuaries have had a very stable career for a very long time. It's not as sexy as slinging ads at Google or Facebook or working at a hip web startup, but it does pay well.
I don't have the math skills to even consider getting into this profession, but it's a very good example of an industry needing very talented people and paying accordingly for them, Insurance companies can go bankrupt if they make bad actuarial decisions...too conservative and they don't make enough money, too risky and they can go broke paying out more claims than they expected.
What I think they do right is similar to what I think the medical profession got right:
Not knowing the industry, however, I do wonder how insurance companies don't just go around the whole thing and hire 25000 Indian number crunchers the same way IT outsourcers "replace" experienced developers and systems engineers. Either the skillset is so esoteric that only the super-intelligent math geniuses among us can do it, or the SOA has the ability to force companies to do what it wants the same way the AMA does in the US.
Actuaries are like gamblers who actually CAN win over half the time, reliably. Usually a LOT more than half the time.
Conversely, gamblers are like actuaries who do NOT know what they are doing and consequently, there exist a plethora of businesses that exist principally if not exclusively to extract money from them because you CAN do so. Trivially. Because they suck at math. These places are called casinos.
In mathematical terms:
Gamblers + math = actuaries.
Actuaries - math = gamblers.
Only if the loss they hit in case of problem is higher than the cost of investing in prevention. If the loss is lower, then they don't care a iota on preventing harm.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
. . . that sounds like a number that came from an actuary.
hmmmmm....
You probably wont get the payout you are expecting. Insurance operates on a "Made Whole" premise. That means you will be as well off as you were before.
Unless the market value of your house has increased to 400k, you will not get 400k. You will get the value of that house. In the case of your house, you can expect the combined value of the debt and equity; but not more. The reason is to make you whole, or in the same financial place as you were before the loss.
That being said, there are some exceptions. If the value of the house has risen, or in the case of extremely low priced homes. As a example close to my home, You may have heard about the fires in Northern California this year. My father is in the habit of, makes a hobby of, house restoration and flipping. There was a house that he had paid 30K for (cash price in an unusual situation). It burnt in that fire. Because there is no possibility of another house being purchased at 30K he received about 75k, the value of a similar house in a similar market. That is close to what he expected from a sale, so it was the amount needed to "make whole."
So, while there are a few odd exceptions, in general you will not profit significantly from an insurance payout. Unless you have a lot of equity, you will not get enough to pay off a large current loan, and make a cash purchase of a similar house.
I wasn't necessarily trying to steer the discussion that way but I would prefer to see a sane single-payer system then the giant clusterfuck we currently have.
Sounds like we are on the same team then. Our current "system" is just absolutely batshit crazy and stupidly expensive with a lot of thoughtless ideology getting in the way of pragmatism and evidence.
If I could drop my current insurance and buy medicare instead I'd happily do so.
Medicare would be a step down from my current insurance but I'm luckier than most in that regard. That said, I think it would work just fine for my actual needs and those of most others and I think it would save our country a vast sum of money if done right.
In that I just want the insurance industry to go away.
Insurance is a useful thing. Don't be so hasty to throw the whole thing out - not that we realistically could. I'll be the first to agree that at least health insurance needs some massive overhauls but insurance and the industry that provides it in and of itself is not the problem. The problems exist because of the regulatory environment (or lack thereof) in which the insurance companies currently operate. They are simply doing exactly what I would expect them to do given the incentives of our current system. The Affordable Care Act was a substantial step in the right direction even if it was an imperfect one courtesy of the ludicrous politics going on in Washington.
We have the system we have because the insurance industry owns Washington DC.
I think it's more complicated than that. Yes, lobbying plays an important role but there also is the odd confluence of ideology (particularly on the political right) and power politics that gets in the way of trying something more sensible.
They pad the pockets of politicians on both sides of the aisle to make sure they get what they want - they outspend the NRA and compete with the defense industry for top "honor" in terms of lobbying spending - and the Affordable Care Act was their collection on their investment.
The defense industry isn't even in the top 10 in terms of lobbying dollars spent (they ranked 18th in 2017). The NRA isn't anywhere near the top of the list either - not even in the top 20 - their influence just is outsized to the amount they actually spend. The biggest spenders actually are drug companies by a pretty wide margin with insurance in second place just ahead of electronics manufacturing.
owe $200,000 paying for a house I no longer have
If the collateral is wiped out so is the loan; the insurance benefits the bank, which is why the bank forces you to pay for it.
If a fire or tornado destroys my house, I'll still have an house and won't have a mortgage payment
I don't advise torching it.
Spock must have studied actuarial science.
Funny thing is in Zootopia's opening scene, one of the tiger child actor's in the play declares he wants to be an actuary.
Marketing is the other applied math and science field.
My insurance company would only pay for replacing the structure, contents and my expenses. If the land is destroyed, it's a truly shocking annihilation, but nuclear attacks aren't covered. Otherwise land value is usually on par with the structure.
A complete loss due to a savage fire might get him $150k in demolitions, temporary living expenses, a new structure and contents. Maybe $200k if his car was lost and his contents are particularly valuable.
The GPP is full of BS.
Clearly we are a society with our priorities straight.
> If you lose your home, the insurance company will only pay for replacement
Yes, the insurance, both the cost and the coverage, is based on building a new 3,500 square foot home to replace the 25 year old peice of junk I live in. At least that's how it is in Texas. Other states may vary.
I thought AI/ML/algorithms spelled the end of all actuaries' jobs?
How many actuaries contribute to open source (or their equivalent of)? That'll be the same thing happening to current open source because the phenomenon runs on cheap warm bodies as much as the companies do. Raise the limits, jump through a lot of hoops, and few will want to just give it all away, nor are insurance companies contributing to open source, in money or employees.
"made whole" is a general rule, yes.
In Texas, home owners insurance can legally be either actuall cash value (made whole) or replacement cost (what it would cost build a new home of the same size).
With property values increasing at 8%-10% per year the last several years, most policies, including mine, are replacement cost. Both the cost and the coverage, is based on building a new 3,500 square foot home to replace the 25 year old piece of junk I live in.
Comment removed based on user account deletion
sure, but if it's to rebuild a new house of the same size and you say it's for a 3500 sq ft house, then to get a 400k payout it would need to cost 400k to rebuild (including cost of finishing demo and clearing the site) a new 3500 sq ft house.
In that scenario, if you use half that to pay off your mortgage, you only have half of what you need to rebuild, and therefore would need to build a smaller house or take out a construction loan to rebuild. Unless you're planning on going the route of being your own GC and doing a large amount of the work yourself to save money so that 200k would stretch to cover it.
I'm a Software Engineer major and my wife an Actuary in the pensions field (Masters in Math), and i can somewhat agree with what you say. She's taken a ton of tests over the years and basically lives in Excel doing calculations and doing what i would consider "boring work". And yet we make roughly the same amount, (however she does make a bit more not that she's official).
But I will say she loves being an actuary, and frankly i couldn't see her doing anything else. It's been a lot of stress and long hours getting to where she is today, but she thinks it's all worth it. I'm not sure why, but for some people, they really enjoy just crunching numbers.
I don't need a brand new 3,500 SQ foot house, so I wouldn't build one. I'd buy an existing $200,000 home of about 1,800 square feet or so.
I am assuming he would use the payout to move to a less-expensive area, leaving him with excess equity to pay off his loan.
It won't pay off your house AND build you a new one. It will ONLY rebuild same like, kind and quality, OR pay you ALS (i.e. apply depreciation to everything) if you want to walk away. That is how it works in ALL states.
P&C doesn't change drastically in regards to the basic business rules that we are talking about here across states.
When you lose your house, you will get an ALS payment right away. The insurance company will also pay for cleanup, etc. Then if you rebuild, you start with the check they already gave you, and as you incur more costs they will write more checks accordingly.
> If the collateral is wiped out so is the loan;
I'm afraid not. Read your mortgage and see if you find that anywhere. It's not there.
What is wiped out is your ability to pay it without eating nothing but rice and beans while living in a roach apartment.
> the insurance benefits the bank, which is why the bank forces you to pay for it.
The benefit to the bank is that when you can't afford two house payments because one house got destroyed, they still get paid. The house being destroyed doesn't relieve you of your responsibility to pay, having insurance means you can pay it off without working three jobs. A lot of people wouldn't work two or three jobs, they'd just fail to pay what they owe if they didn't have it insured.
The field of AI, as well as Big Data is certainly about "crunching numbers". Lots of them.
> It won't pay off your house AND build you a new one. It will ONLY rebuild same like, kind and quality
Yes, the amount (on my policy) is to build a new house of the same size, 3,500 square feet. That's a really big house. About $400,000 to build a new house the same size.
I wouldn't build a new house twice the size of what I need, a five bedroom house for me, my, wife, and our 4yo. Instead I'd use half of the $400,000 to buy an existing 1,800 square foot house, half to pay off the existing mortgage.
> Pay you ALS (i.e. apply depreciation to everything) if you want to walk away. That is how it works in ALL states.
Here's some info from the Texas Department of Insurance for you.
https://www.tdi.texas.gov/pubs...
In Texas , two different kinds of homeowners insurance can legally be sold. One is actual cash value, deprecation and all. The other is replacement cost - what it would cost to build a new home of the same size. I have replacement cost coverage. Because of various factors with the housing market, most new Texas policies are replacement (cost to build new) rather than cash value.
If it really pulling down a decent wage Actuarial science will be on the next hit list for South Asians and for outsourcing if it is not already.
South Asians can do like what they did with tech certs and give everyone a passing grade and send them to the US.
Although this post on medical insurance versus health plans is way off topic from the discussion about Actuarial Science as the Most Valuable College Major, I appreciate and agree with the poster, and would like to throw in a few other thoughts.
The Affordable Care Act did not make care more affordable, it subsidized the payments for what is currently called "health insurance" for those without the means to pay for it on their own. Although this can be considered a social good, it was achieved by being disingenuous regarding the method, and was such a boon to the insurance companies that the possibility of profit-driven political forces can't be ignored. It would have been nice if the individuals behind the Affordable Care Act had actually examined what was driving the cost of health care in the United States, and introduced legislation that made careful, reasoned changes to the playing field so that market forces could be more of a factor in health care costs.
It would be a good start if the health care debate would recognize the difference between health insurance (insurance against the risk of high medical expenses) versus health care, and stop conflating the two. Perhaps we would discover that we need three separate things: basic health care (made/kept as affordable as possible through market forces or government mandate), health insurance (to cover high unexpected costs for unexpected but not extraordinary events such as serious acute illness, broken bones, and the like), and some kind of government-supported program to handle costs associated with extraordinary health losses (such as those associated with unusual conditions such as rare cancers, chronic illnesses, and the like). What I am suggesting is something parallel to the combination of home maintenance, home insurance, and (something in between government-backed flood insurance and disaster relief) that most homeowners in the US use to manage the "health" of their real estate.
Needs-based government assistance covering costs of the first two (health care and ordinary medical expense insurance) could still be provided, but market forces and the elimination of the long-term/extraordinary costs associated with unusual and chronic illnesses would help keep those costs in check both for people who paid for it directly and for the government when assisting those in need.
Sorry for further disrupting the engaging discussion about the value of Actuarial Science as a College Major... carry on...
That's an important perspective. Some people find programming and computer technology terribly boring and/or frustrating. I don't want to discourage anyone but just giving my personal perspective and mistakes. My biggest mistake really was not fully appreciating what I was studying to do/be rather than the field of actuarial science. Applying and proving my math and analytical skills was a very appealing part of the career choice but in the end the wrong choice for me. The life insurance side is one I didn't experience but it seemed to attract some great applied mathematicians. And once you pass the exams you are on top of the pyramid. Congratulations to your wife for making it through! Its a big accomplishment.
The Texas Department of Insurance web site has the precise rules if you want to know exactly what they actually are, as opposed to what you've heard from your brother-in-law, who is a carpenter who once got an insurance check for a job.
https://www.tdi.texas.gov/
Alongside those rules is the negotiation between the public adjuster you should hire and the insurance company's adjuster. It might go something like this:
Your adjuster: we estimate replacement cost at $390K to $420K.
Company: Our estimate is $395-$405k, so we're in the same ballpark, slightly lower.
Yours: Due to the storm, construction crews are very busy right now. Under rule x subsection y, you have no more than 30 days to issue the initial payment. It's already been 22 days. It could get very expensive to get a crew to drop their current project and start on this this week. Very expensive. Might end up costing $435K to get it done within the required time frame. ... We'll take $400K cash today, though.
It is mind-numbingly boring work. Not to mention that "actuarial science" is a huge misnomer. No science, not even any statistics worth mentioning in practice. There are rules, directives, supervisory agencies, and regulatory frameworks. It is like the legal department got stuck in a spreadsheet.
Good job security though. Insurance agencies will lap up anyone with half a brain, a degree, and a stamina for monotony.
circa 2006 or 2008 if IIRC. Anesthesiologist was highest the next year IIRC. Three offspring, two math and one biochem major, math majors started actuarial exams but petered out after three or four exams. Besides math, there is a lot of financial options valuation involved. Both got decent jobs anyway, oldest daughter (math/econ) is on a data science track doing a part-time Master's at a very highly-ranked university, youngest son (applied math) is a software QA guy and probably moving into development or project management at his next review. Oh yes, youngest daughter is an anesthesiologist and doing very well. All went to a US News top 50 college for undergrad.
Comments about the exam process being a very high hurdle are absolutely true.
The other point I would make is that actuaries have a role wherever an organization has pension liabilities. This involves predicting investment returns as well as pension recipient survival rates. It is not just insurance.
People have forgotten because the $35 visit to the doctor has disapeared. Now if you go, a single cough drop you receive during your visit is going to cost you $10.
I was an actuarial science and statistics major in undergrad and realized my senior year of school that this would be a dry and boring career. I was good at math and didn't really have much exposure to career opportunities for math majors, but had heard in the early 2000s that actuarial science was a good career choice. Thankfully I never became an actuary and I took the "easy" route after school and earned my CFA charter, got an MBA from a top 20 school, and went into the investment management industry. Most of my friends from undergrad have pivoted to other fields as well for similar reasons.
owe $200,000 paying for a house I no longer have
If the collateral is wiped out so is the loan; the insurance benefits the bank, which is why the bank forces you to pay for it.
That's not how it works. If you have a mortgage, then the lender will be listed as a "loss payee". They will get their money FIRST before you get a single dime. Then you will likely need to take out another loan to build a replacement house.
But many people don't get actual replacement cost plans with code upgrades. So they won't pay you the difference to upgrade the house to existing building codes which is required to actually build a new house. These costs can be substantial if your locality decides that your area floods a lot and you need to put in a mound to build upon.
Standard homeowners insurance policies don't include war/terrorism, earthquakes, and flooding. There's separate insurances for some of those.
I don't know, but it works for me.
... yields great success in skimming a few extra beans.
Who woulda thunk?
News brought to you by CORI - Captain Obvious Research Institute
We suffer more in our imagination than in reality. - Seneca
But I guess what matters are the odd of it happening times the cost of it being true.
Some drink at the fountain of knowledge. Others just gargle.
> the most likely outcome would be for you to have a $400,000 home with a $200,000 mortgage, not a $200,000 home with a $0 morgage.
In this area, the average home is on the market for about three days. So let's say I had a $400,000 house and a $200,000 mortgage. It would take a few days to sell that $400,000 house and turn it into $200,000 cash and no mortage. Which is exactly what I would do.
Well, I might end up with a $230,000 home and a $30,000 mortage. Or pay off $10,000 in higher interest debt and have a $40,000 mortgage. Whatever I want to do, if I did have a brand new $400,000 house being built, it doesn't take long to turn that into cash and do whatever I want with it.
It's insured for $400,000. If it's destroyed by a hurricane (or more likelly in my area, tornado or fire), I'll pay off the $200,000 I owe and then use the other $200,000 to buy another house with cash.
You don't know how insurance works. They won't give you $400K for a $200K loss. You are giving them more of your own money to insure a nonexistent risk which they'll never have to pay.
Here's some info from the Texas Department of Insurance for you.
https://www.tdi.texas.gov/pubs... [texas.gov]
In Texas , two different kinds of homeowners insurance can legally be sold. One is actual cash value, deprecation and all. The other is replacement cost - what it would cost to build a new home of the same size. I have replacement cost coverage. Because of various factors with the housing market, most new Texas policies are replacement (cost to build new) rather than cash value.
Are you being willfully obtuse? The insurer's "expected cost" is NOT $400,000. That is the policy limit. It's the MOST they would pay to rebuild the house, not what you are entitled to in cash. If the actual cost of building a like-for-like home (same square footage, same construction grade, similar materials quality) is much less than $400,000, then you won't pocket the difference.
They are not required to negotiate anything with you, and they have no reason to. You'll be paid ACV. If you don't rebuild, you'll get nothing else for RCV, because replacement value is only paid out if there's a replacement. There is no scenario in which you get $390,000 cash on any homeowner policy for a destroyed-and-not-rebuilt home worth less than $200,000.
Molard is correct. You don't know how insurance works, and knowing the link to the Texas Department of Insurance doesn't count for anything. You have not cracked the windfall of the century here. You're just failing to understand what an RCV payout basis is. On an RCV policy, you get the money above the ACV value ONLY IF you replace the property and ONLY UP TO the cost of a like-for-like replacement. You cannot get $400K cash on a $200K loss.
If the cost to rebuild the house is $400K but your pre-disaster property was only valued at $300K based on market conditions, there's no way for you to turn that back into $400K. You can sell for $300, pay off your mortgage for $200, and be left with $100K in proceeds. However, it's extremely unlikely that the cost to rebuild the house will exceed the total value of the property by that much unless you live in an area where the land under the house is essentially worthless (which means that your story about rapid appreciation no longer holds true, since dwellings themselves do not often appreciate in value after being built, other than renovations or homes designed by famous architects).
So many flaws here:
Number 1 - homeowner's insurance only covers the value of the DWELLING, not the property as a whole
Number 2 - the existing dwelling on the property is worth substantially less than $240K, since part of the purchase price was the land, and the dwelling has only decreased in value over time unless you've done significant upgrades
Number 3 - the insurance company will only authorize payments to replace a similar (or cheaper) dwelling. Just because you have a $400K policy does not mean you can upgrade build quality or finishes on the insurer's dime
Number 4 - the cost to replace a home currently valued at under $200K with a similar quality home is probably not going to eat the full $400K policy limit, even with inflation of labor costs
Number 5 - even if it DOES cost the insurance company $400K to rebuild, not all of that goes into the new dwelling itself (cleanup, temporary lodging, furnishings, etc. are all part of that)
Number 6 - even if you ignore all of that, the insurance company spending $400K on building a dwelling doesn't mean that the market will suddenly value your house at $400K just because that was the investment made in it. Just think of how much more YOU would have paid for a brand-new home vs the aging one you bought. It's probably not double. Your property will be worth, at most, what a new-construction home in your area is worth. It's highly unlikely 25 years of aging would have halved your property value, and 20% is a more realistic increase.
Number 7 - even if you miraculously do have a property appraised to reflect the $400K sunk into it, selling the home will incur a number of costs that eat into that profit.
In short, it's time for you to give up the fantasy that you've outsmarted the entire real estate and insurance industries. A savvy homeowner might navigate this and end up a few thousand dollars ahead, but not double the property value. And it's certainly not enough to make losing your whole home and nearly all of your possessions, valuable and sentimental, worth it.
I graduate from grad school with a phd in statistics, and became an actuary. The work was boring, and the hours long. I got paid a crappy $40K a year.
I quit that, and went to do work at a drug company. ISE was worse; even more boring with worse hours. I did get a better $45K per year, though.
Then I quit that, and became a programmer as a federal government contractor, making $65K/year and forbidden from working overtime.
Forget actuarial science. Even a half-assed programmer makes more money, and probably does more interesting work.
Some things never change...but need to be relearned since it happened before the "Interweb" was invented.
Actuarial science was constantly being lauded as "the" or "one of the" "most valuable college majors" when I was in college in the early 1980s. Glad to see that some things haven't changed since then.
I've long held the view that IT and SW development need to figure out a way to form a professional organization like the one physicians have. A "lite" example of this is the Society of Actuaries, and it looks like they're doing their job.
I'd start with a guild like the Screen Actors Guild (SAG). One can start with working conditions and hours, leaving salary negotiations out of things.
Yes, you'll have to pay the overhead of dues, but you get an organization with lawyers on retainer to help in working hour and unjust dismal disputes. It keeps collective bargaining out of things, which a lot of people have a problem with. It may also be possible to get group health insurance discounts, which people with families could appreciate (also, home and auto).
Further down the road, the guild can perhaps have qualification testing so that one can "prove" one is worth more by developing skills ("Third Stage Guild Navigator^W Coder"), perhaps based on CMU's CMMI.
Unless the market value of your house has increased to 400k, you will not get 400k. You will get the value of that house. In the case of your house, you can expect the combined value of the debt and equity; but not more. The reason is to make you whole, or in the same financial place as you were before the loss.
To be even more 'accurate', it's rarely the house (structure) that is worth (e.g.) 400k, or that goes up in value--it's the dirt. Generally you're buying the dirt (location! location! location!), and the structure is just an added bonus.
In most US locales you can build a really nice house for $200-300 per sq. ft, and even something decent for $150. It actually doesn't cost a lot (relatively speaking) to build a new structure to live in.
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I think that those are some good points, but health care can be complicated, and the financial incentives can have unintended consequences.
If someone only has "catastrophic' coverage, they might have an incentive to avoid the outlays associated with "minor" issues, and thus those issues might tend to develop into major ones. Whoops, missed that early cancer diagnosis and now you are dead and/or a major money drain. Whoops, you skipped a cheap vaccination, now the whole town/school/business is sick. I guess we would need to employ some actuaries to figure out how common this type of thing is an how much more or less expensive it is then other systems that cover various "preventive" medical tests and procedures, even if they are "minor" expenses.
I general we as a society end up covering a lot of emergency catastrophic medical expenses, regardless of the patient's individual coverage (emergency care is usually rendered before checking billing status). It makes sense to me to use a single-payer system with a mandate to cover the whole population, but at the very least all of the paperwork and forms should be standardized if we are gong to have a mess of different insurance and HMO systems out these.
Yes, it does make sense for insurance to cover preventative care and checkups, because it did reduce overall costs. That's why they did it.
> guess we would need to employ some actuaries to figure out how
Yes, the insurance industry employed a lot of actuaries to figure that stuff out.
> at the very least all of the paperwork and forms should be standardized if we are gong to have a mess of different insurance and HMO systems out these.
You don't have separate car companies for each state, you don't have different standards for cell phones or beef in each state, where companies can only sell cars or phones or beef in their home state. How we use and interact with cars is pretty nuch standardized across the country because the same cars are sold everywhere, with Toyota's Texas plant competing with Ford's Chicago plant. Why in world don't let insurance or health plans be sold across state lines. A Texas company should be competing with a Florida company to offer the best deal (and the most convenient online, paperless experience).