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Want to be an actuary? Odds are, you’ll fail the test

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Re: Want to be an actuary? Odds are, you’ll fail the test

#111

Post by dragonwriter »

Buge wrote: post #108
dragonwriter wrote: post #96

Earlier quoted context omitted.

> ...I got zero ($0.00, zlich, nada) from the other driver's liability insurance. Well, yeah, you didn't legally establish any liability, or even, apparently, make even the suggestion of the intent to do so. Insurance companies, being for-profit entities, aren't in the business of giving out gifts. > Now, if I had comprehensive coverage, they'd be facing my insurance company Yes, dealing with other driver's insurance…

>I don't see a scam anywhere. They are telling the government they will pay out if the insured party is at fault for an accident, but in some (many?) cases they don't actually pay out. That sounds like a scam to me.

> They are telling the government they will pay out if the insured party is at fault for an accident

No, they aren't.

They are telling the government and their customer they will pay out if the insured party is found to be legally liable for injury or property damage while driving. (That is, in exactly the situations where the customer would legally be obligated to pay.)

They are also telling their customer that they will defend them from such claims to the extent reasonable, settling where it makes sense to contain liability. That is actually a big part of why one would pay for insurance rather than posting a liability bond (as most states allow) unless you have the funds to keep a general attorney on retainer and seek task-specific representation as needed.

Had they paid out when there was no expectation you would establish liability, that would be a scam against their paying customer.

Re: Want to be an actuary? Odds are, you’ll fail the test

#112

Post by gizmo686 »

dragonwriter wrote: post #100
AQuantized wrote: post #79

Earlier quoted context omitted.

The 'scam' seems to be insofar as wealthy and powerful entities can exploit the functional inability of those less wealthy and powerful to meet them on even terms in the legal system. I think we could all agree that in an ideal world if someone is at fault, their insurance should pay out to those they damaged. The reality is that may only happen if you have an entity of similar magnitude to go to bat for you. That do…

> The 'scam' seems to be insofar as wealthy and powerful entities can exploit the functional inability of those less wealthy and powerful to meet them on even terms in the legal system. Even without insurance or greater wealth, a party from whom you believe a liability should exist who has no interest in paying could have done the same thing here. If you aren't willing to sue over a disputed liability, it might as we…

> Any proposal to do that in effect makes the police investigation a court of first instance, which either means creating additional procedural rights that apply before it can be completed (driving up costs) or a very real denial of due process.

Not nessasarily. The 'additional weight' could still be something that requires a suit to take advantage of directly, but which the threat of compels behavior. For example, many localities have rental laws that compel the landlord to pay thrice what they would otherwise owe in certain circumstances. E.G. if my landlord simply refuses to refund my security deposit without proper reason, or without following proper procedures within 45 days, then I can sue for 3x the deposit and attorny fees.

A similar thing can be implemented for vehicular damages. Something along the lines of:

1) If you are found liable and

2) Were given adaquete notice and oppurtunity to pay and

3) Ought to have known you were liable

Then the defendent is entitled to punitive damages for your making them take you to court. You don't even have to go as far as most tenent laws go. You could allow for a loosing defendent to argue that there defense was reasonable, (or reasonable given evidence available to them at the time), and that they should therefore not owe punitive damages.

Of course, this still is only tangentially related to insurance.

Re: Want to be an actuary? Odds are, you’ll fail the test

#113

Post by poulsbohemian »

d136o wrote: post #39

In this [1] interview by Barry Ritholtz, Markel CEO essentially told the origin story of an insurance giant. Basically a family member was a lawmaker, passed a law that drivers of the newly invented cars (maybe horse buggies?) must be insured. They simultaneously started a company that sold insurance. Over time they learned to make money from investing their customers capital. It blew my mind at how candid he was abo…

>Title insurance when buying a house also seemed like a total “legally required” joke.

Real estate agent checking in here... I agree with you, but there's always a but... the problem is that there really are situations where there's a cloud on title or where title is questionable. This doesn't mean there's anything nefarious going on, and it also often isn't a question of history (IE: title recorded on parchment or something). It also seems to me that some states are just better at maintaining good title records over others - and again, I'm not convinced this is directly related to the timespan of recorded history.

So the problem then is an 80/20 or a 99/1 thing... 90+ % of properties the title insurance is going to be a waste of money. But in those few cases, it really could make a difference. Since the amount of money involved is usually quite small, especially relative to the size of the transaction, it becomes really hard to change the system.

Re: Want to be an actuary? Odds are, you’ll fail the test

#114

Post by d136o »

throwawaygh wrote: post #51
d136o wrote: post #39

In this [1] interview by Barry Ritholtz, Markel CEO essentially told the origin story of an insurance giant. Basically a family member was a lawmaker, passed a law that drivers of the newly invented cars (maybe horse buggies?) must be insured. They simultaneously started a company that sold insurance. Over time they learned to make money from investing their customers capital. It blew my mind at how candid he was abo…

> It blew my mind at how candid he was about the fact that his business exists due to regulatory mandates. This is extraordinarily well understood in the insurance industry. They don't think of it as odd or a dirty secret, at all. It's more surprising that he was so open about the naked corruption/nepotism in the origin story. Apparently there's a sector of society for whom that is also normal and acceptable. > I fee…

> It's more surprising that he was so open about the naked corruption/nepotism in the origin story. Apparently there's a sector of society for whom that is also normal and acceptable.

I distinctly remember this from the interview as well! He simply drops it in there that he married into the family, that it’s a family run company, that the family owns some significant portion of it… “family family family”… it was an odd interview.

> but are you also self-insuring against a lawsuit for damage to the other guy's car?

I guess their insurance company is going to come after me/my insurance company to pay up… yeah without insurance I’d simply hope I could reason things out with whoever.

I’ve actually had to do that in the past. After a minor collision I asked the other driver whether we could settle things directly, and how much he’d feel was fair for me to pay to fix damage to his motorcycle. He named a figure and we drove to an ATM and I paid him that, we still exchanged info in case anything else came up but nothing did. Yes it was scary, but I think it was more efficient and less hassle in the end. This occurred in Los Angeles.

Re: Want to be an actuary? Odds are, you’ll fail the test

#115

Post by jbotz »

riskneutral wrote: post #12
stbtrax wrote: post #3

From experience from a few close friends: Actuarial science is always in the lists of top jobs but it's a terrible career. It's quite limiting and doesn't pay particularly well. The companies are all old and stagnant and the amount of time put in to studying for exams is taxing. It'd be much better ROI to put that time into studying for sw-eng roles. That is, unless you're particularly interested in memorizing math f…

> unless you're particularly interested in memorizing math formulas for insurance calculations Note that the formulas in question are the opposite of interesting formulas. They're just made-up regulatory rules about how much capital an insurance company has to hold in order to sell insurance. Everyone agrees that some amount of capital needs to be held. Everyone, except maybe some of the "actuarial scientists" themse…

"...that is the only employer of actuaries in town, so they are completely marooned..."

In any career there were always those who will limit themselves to the options "in town" and those who will go anywhere, anyhow to move ahead or find a better quality of life. Not saying that one is right and the other wrong, and this may now finally change with the remote work wave, but, there it is.

Re: Want to be an actuary? Odds are, you’ll fail the test

#116

Post by SilasX »

dragonwriter wrote: post #101
SilasX wrote: post #80

Earlier quoted context omitted.

No, he’s (reasonably) upset that the other side’s insurance did not pay out when it was clearly their client’s fault, banking on his difficulty of filing a lawsuit. What do you call someone who victimizes people he know have a disadvantage in suing him?

> What do you call someone who victimizes people he know have a disadvantage in suing him? A for-profit business. Sure, unequal, wealth-gated practical access to the courts is a real problem, and it impacts basically every area of American society. But it doesn't make mandatory auto liability insurance a scam, any more than it makes literally every commercial industry a scam.

The claim I was defending was that the way auto liability insurance is done is a scam, not that the concept of requiring liability insurance is a scam.

Looking back, the original post's comment on that point was a final aside that was ambiguous. But my defense is of the charitable interpretation of that remark. Any auto liability insurance system should be written to avoid that kind of gaming.

Re: Want to be an actuary? Odds are, you’ll fail the test

#117

Post by dragonwriter »

lostcolony wrote: post #109
dragonwriter wrote: post #96

Earlier quoted context omitted.

> ...I got zero ($0.00, zlich, nada) from the other driver's liability insurance. Well, yeah, you didn't legally establish any liability, or even, apparently, make even the suggestion of the intent to do so. Insurance companies, being for-profit entities, aren't in the business of giving out gifts. > Now, if I had comprehensive coverage, they'd be facing my insurance company Yes, dealing with other driver's insurance…

The police report, however, did. Throwing ones hands up to say "well, of -course- the company is going to avoid paying anything out unless taken to a court of law" is to abdicate corporations of all responsibility other than profit making. Just because a person can't afford justice doesn't mean we should accept injustice.

> The police report, however, did.

Police reports are evidence that can support a finding of liability, but they are not a legal establishment of liability. There are very good reasons (the due process clause of the 14th Amendment comes to mind) why that should be the case, it's not a scam..

> Throwing ones hands up to say "well, of -course- the company is going to avoid paying anything out unless taken to a court of law" is to abdicate corporations of all responsibility other than profit making.

Untrue. The corporation here has other responsibilities, but they are all to their paying customer.

Re: Want to be an actuary? Odds are, you’ll fail the test

#118

Post by xeRTRex »

One of the most frustrating aspects of the process is that once outside of insurance/insurance-adjacent industries, the credentials are useless. I have my FSA (fellowship of the SOA) and CERA (chartered enterprise risk analyst) from the SOA. I no longer wanted to work in insurance and left for data science. I felt the need to obtain a graduate degree to feel qualified enough for the data science space. My Master's degree was a cake-walk compared to the actuarial process but that is what my peers care about, and I always feel not quite at the same level as my peers with PhD's.

It's even more constrained than my experience. The U.S has two actuarial governing bodies: the CAS and SOA - the former handles P&C, the latter just about everything else (life, health, retirement). The two organizations hate each other and it's almost impossible to get a respectable job in one industry if you have the wrong credentials. What makes it even more crazy is that the two orgs have the same exact first couple of qualifying exams.

My advice has always been: only consider dedicating your time to these exams if you're highly certain this is the career you want. The pay isn't as great as it once was, you're constrained to legacy industries, the process is as time-consuming as a PhD without getting the respect that comes along with it, and you need to decide early on which area of insurance you'll want to practice.

Re: Want to be an actuary? Odds are, you’ll fail the test

#119

Post by vageli »

Traubenfuchs wrote: post #84
romwell wrote: post #57

Earlier quoted context omitted.

Side story about how satisfied people can be with the mandated insurance. I was on coast-to-coast road trip when I got into an accident in TX. Someone was trying to pass me on the left in a turning lane, veered into the incoming lane, and then hit my vehicle's front wheels from the back. The police ticketed the other driver, and told me that insurance will surely take care of that on my side. "Wow, it's worse than we…

Am I missing something here? Shouldn‘t the other driver pay you personally? And then he‘d have to hash out whether his insurance pays him that money?

> Am I missing something here?

> Shouldn‘t the other driver pay you personally?

That still means the burden is on OP to sue the other driver since their insurance company was not paid to represent them in this type of case.

Re: Want to be an actuary? Odds are, you’ll fail the test

#120

Post by d136o »

gurchik wrote: post #55
d136o wrote: post #39

In this [1] interview by Barry Ritholtz, Markel CEO essentially told the origin story of an insurance giant. Basically a family member was a lawmaker, passed a law that drivers of the newly invented cars (maybe horse buggies?) must be insured. They simultaneously started a company that sold insurance. Over time they learned to make money from investing their customers capital. It blew my mind at how candid he was abo…

> Are there insurance products that people are really satisfied with and trust will pay out in case of event X? I've always been happy with renter's insurance and have paid it since my first apartment in college. I pay $100/yr for a 50k limit policy. Unlike car insurance I am not required to have this, but I've always considered it to be worth it. I also pay for pet insurance. Again, not required to have it but when…

Thank you for the positive example!

Have you had to get anything paid out from renters insurance?

Pet insurance seems like a great business to be in… is there anything that requires you to actually have pet insurance? Would it cover costs from your pet hurting someone else? Or is it more to cover pet health costs? Really curious to know the ways it’s similar or not to US human health insurance hah

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