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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.
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.
It does prevent harm. They sell a product which reduces the risk its purchaser is taking, the risk of ruin. Ruin causes harm.
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.
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.
Automation is already a thing. It has been making many jobs obsolete for many decades. Actuaries are still here.
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.
Feel free to put together your own report ranking college degrees in order of "making the lives of humanity happier" but that's simply not the ranking order used by this report.
The vast majority of insurance is voluntary and that's a good thing. All insurance is fundamentally gambling but there are definitely cases where a high probability or certainty of a known cost is better than a low probability of a potentially much higher cost. This is mostly true when the higher cost is devastating or entirely out of reach.
Actuaries are simply gamblers who are smart enough to accurately calculate the odds. If you can find a sucker to bet against, by all means gamble with a sucker, but the actuary is more likely to stay in business long term.
And if you don't want to gamble at all, you'll still have to contend with the uncertainty of the universe, but nobody is forcing you to lay cash on the "child fell down a well" scenario. However if you are doing stuff with a potential to cause serious harm (operating heavy machinery, practicing medecine, etc) you can expect to be forced to carry enough insurance to pay for your mistakes even if you swear that you'll never make a mistake. The rest of the world simply isn't willing to take your word on your own assessment of your own perfection.
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?"
But the insurance industry does improve safety and prevent harm. It encourages programs, standards and good practice in those it insures in exchange for lower insurance rates. So hurricane resistant building designs will get lower premiums in hurricane prone areas. And they do this by accessing risk based on statistical evidence. It pushes best practice before bad things happen.
I think much of the issues with say flood insurance propping up otherwise too risky flood prone communities, is that the insurance is government subsidised in flood prone areas. Which distorts the market pressure from increased insurance costs on flood prone areas, and instead encourage further building.
Probably the clearest example I can think of is the setting up of the "underwriters laboratory" for what was originally fire safety standards and approval for fire safety in buildings and electrical safety, setup by the National Board of Fire Underwriters, now the American Insurance Association trade association. UL standards are everywhere, and ensure product safety over a wide range of products.
....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
Obviously their function is not to prevent hurricanes. Nobody has made this ridiculous claim. If you don't know what "risk of ruin" means then google it and perhaps you'll better understand the point of that industry. Not all businesses are large enough to cover all their risks with their own capital and it is not in their interests or the interests of society to see them disappear due to some disaster they cannot prevent.
Already happened for about 10 years. But
1. Not all lemmings could handle the math
2. Not all schools want to admit all the lemmings
3. Like accountants, lawyers and doctors, the field is well-protected through the certifying organizations.
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.
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.
Automated trading has been around since at least the early 90s. These machines are managed by people, maintained by people and continually developed by people. So yes, it does allow this industry to get more done with fewer people and gets it done quicker, but it is not close to replacing them entirely.
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/
That shitty job Ben Stiller did in Along Came Poly. That's what it is.
108k/yr is also shit money.
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.
If a stock broker is allowing his clients to buy on margin, for example, then there is some risk to manage.
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.
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.
Sometimes it does prevent harm.
In a lot of cases the insurance agent will give you advice how to reduce your premium by applying simple safety tips that will reduce your risk - and their risk to pay your claims.
In rare cases the insurance agency will take it upon themselves to fund certain safety features in public space, just to reduce the value of claims they must pay due to lack of these features. And lobby the lawmakers to mandate safety features that will reduce their costs.
45 5F E1 04 22 CA 29 C4 93 3F 95 05 2B 79 2A B2
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:
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Maybe if you live in the heart of San Fran or Midtown Manhattan, outside of there that's a decent salary unless you're also working 90 hours a week.
. . . that sounds like a number that came from an actuary.
hmmmmm....
Ah it's the anonymous dude who just goes around randomly calling people "psychopathic". Nice to see you again buds. Where ya been? I've missed your particular brand of crazy.
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.
Brokers help their customers manage risk through several mechanism. One of the first, and best understood is diversification. Some risk can be managed by shorting similar, but lower value, companies or companies in the supply chain of a major investment. I don't short sell because I do not want to be in a position where I am wishing ill to befall another person, even if I don't know them.
However, portfolio risk management is different than specific tangible asset risk management. For one thing, it is not regulated in the same way. The best example of this are Credit Default Swaps. While they acted as insurance products, they were not regulated as such. As you may recall, this allowed them to be purchased by people who were not expected to suffer loss and as such would not seek to be "made whole."
Rational people expect to be compensated for taking on risk. Recreational gamblers pay money to take on risk. This is the key difference. Sometimes, like you say, it's due to ignorance. Sometimes its because they get such a high from the few times they win, they're willing to pay silly money in order to recreate the experience, even if they know deep down it's self destructive.
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.
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 there were too many lawyers, especially in specific fields? https://www.usatoday.com/story...
"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.
108k/yr is also shit money.
An AVERAGE salary of 108k/yr for recent graduates is shit money? What, pray tell, are you comparing it to?
The article was not clear on whether 108 is the arithmetic mean or the median,but it clearly is not the upper bound. It's also not entirely clear who is included in the sample pool, but given the repeated mention of graduates I'd guess that they're probably not including people with 30-40 years experience in the average.
I'll save you the trouble of reading the article by pointing out that it does list other areas with higher salaries but penalizes them for higher unemployment. Actuarial comes out on top because IF you pass the tests then you've got a pretty high probability of having a solid, but not rockstar income. And as a bonus you'll know how to calculate and correctly understand that probability.
To be fair, they didn't list the average salary of people who attempted to become actuaries but utterly failed every exam they attempted. If your skill set is "fake it till you make it" or just plain "fake it" then actuary is not going to be a viable career path for you.
LOL. My wife (actuary on pension plans) LOOOOVED this part of the movie. She perked up from her game of Candy Crush and was so excited that her job field was even mentioned in a movie and was put in a positive/desired light towards kids.She mentions it all the time when this movie comes up.
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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.
> 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.
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> 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...
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.
I am a bit surprised that traditional health insurance in the US doesn't bother with health prevention much and will often refuse to cover many procedures or treatments that can improve long term health. It's like their model is to fix things when the break rather than preventing the breakage. And the high deductibles that most plans have seems to just be a blatant way to not pay out any money for anything minor. On the other hand, I'm in Kaiser Permanente which takes a proactive stance on prevention while also being affordable.
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.
By holding long positions, you benefit from short position holders losing money.
By your own standard, that's 'wishing ill to befall another person'.
You can't participate in any zero sum games.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
... 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.
I knew one once. What got him down was the fact that it was mind numbingly tedious.
I am rather surprised that most of it hasn't been automated away, though. Isn't this the kind of shit that ML is supposed to excel at. Please forgive the pun.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
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.
If no one goes short it has little impact on my long position. No one has to lose for my position to serve me well.
By comparison, for a short to be profitable, real people, typically the people who have the least options available to them suffer (here I do not mean the financial device known as options, I mean choices available to an individual). I do understand your point, but I do not see long and short positions as being equally dependent on the loss to others.
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.
.... and pull us all back into the crab bucket.
OT: You wouldn't happen to be the Richard "Dick" Head who I used to know from LOSCON?
~REZ~ #43301. Who'd fake being me anyway?
Well, don't buy insurance and you won't get cunted.
You can buy options. Not on all companies, but large publicly thickly traded companies, sure.
You have to watch a few videos, take a test and have a non-trivial balance (a few thousand) with a broker.
Not that complicated, unless you want them to be, but they are 'bet like', which is what's good about them IMHO. And bonus, for small 'bets', it's just you and the bookie (broker), who isn't hurting.
Lots of investments are proxies for others taking hits. Owning Tesla means you bet (GM/Ford/Fiat/Mercedes/VW/Peugeot/Honda/Toyota) won't be able to execute on electric cars...I'm almost talking myself into it, but no, insane price. I digress.
You're standard is hard to be a purist at. What about the poor people you bought the undervalued stock from? Even long term investors time markets.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
The flaw in your reasoning is that I am not a "purist." Having limits does not mean that all is forbidden. Profit seeking does not mean that any profitable activity is to be engaged in. Positions are nuanced.
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).