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But it's in their best interest to assume it wont happen. If I correctly predict, as an actuary, the demise of the industry, I don't win anything. If I can cal
by harperlee 11y ago
But it's in their best interest to assume it wont happen.
If I correctly predict, as an actuary, the demise of the industry, I don't win anything. If I can calculate a superprecise premium for my insurance product based on this being true, I have an expensive product that underperforms the competition, and management is not happy. Whereas if I ignore superlong trends, I get to earn my salary, probably until I retire - you know, it probably won't happen. I value a product competetively. And if we miss, it won't be my only problem. So even if I can do the right thing, I will be punished for the event.
- mc808 11y agoIf actuaries can collectively predict the future, then term life insurance premiums should show a strong trend down as we approach the point where longevity increases significantly (adjusting for income, inflation, etc). From a few seconds of googling, they seem to be flat or increasing. It might be good to look back in 100 years and see if they got it right.
- sammydavis 11y agoPredicting the future of lifespan based on the last 100 years is reasonable. That sensible system can't predict a black swan or revolutionary idea; suppose wereduce the chance of heart attacks by 90% by treating your blood chemistry. That's not impossible, also not possible today. But that would expand life expectancy.