Re:Want to be an actuary? Odds are, you’ll fail the test
by gruez on Tuesday December 28, 2021 @07:48PM
(#29720306)
>The article (about how hard actuarial math is) and the insurance buyers make the mistake of thinking that all that matters is downside in case of event X with particular probability P. However, instead you have to think about chances of X AND chances of being able to navigate a system that is outright adversarial to parties that are not the insurance companies.
Are people going through and calculating the expected utility of purchasing insurance, and that calculation is being thrown off by counterparty risk, leading them to buy insurance they wouldn't have bought? I doubt it.
>The “house” always wins…
is there an expectation otherwise? You buy insurance to protect against risks, not because you think it's a positive expected value investment.
Re:Want to be an actuary? Odds are, you’ll fail the test
by diffeomorphism on Wednesday December 29, 2021 @11:17AM
(#29726176)
Yes, the expectation was that the risks are those you bought insurance for. Additional protection against being bullied by other insurance companies is not obvious.
I think this might be at the heart of it.
The article (about how hard actuarial math is) and the insurance buyers make the mistake of thinking that all that matters is downside in case of event X with particular probability P. However, instead you have to think about chances of X AND chances of being able to navigate a system that is outright adversarial to parties that are not the insurance companies.
The “house” always wins…