It's a case where highly-educated people often make errors that laypersons would not.
Not discounting your main point, but there were plenty of experts and laypeople that were completely unsurprised by the housing crisis. If anything, I think the housing crisis was more of a case that so many people had a vested interest in thinking/pretending the music would never stop.
Regardless, we should be skeptical of the assumption that we're dealing with a normal distribution.
Nonlinearity Breeds Contempt
https://www.youtube.com/watch?v=C6eX6KaSBjc&list=LL&index=32...
I don't know if it's a once in 200 years event or not, but this is a US insurance company, presumably talking about numbers in the US. Aside from ww2, in which the US had around 400,000 deaths, the number of Americans who have died in wars or disasters has been fairly small relatively.
Even the 400,000 for WW2 was over four years, whereas the US has had around 400,000 covid deaths a year for the last two years, and even more if you just look at excess mortality (however the population is obviously larger now than during ww2).
I just don't take it seriously anymore. Track 200 factors, 200 businesses, or 200 industries and you will see 1 event per year. Track all of the above and you will see 40,000 such events in a year.
More to the point, their actuarial model was probably wrong, not reality. Somewhere buried in their model were assumptions excluding black swan events
The person that sold that idea cashed out and left the company long ago.
Where are you getting these numbers? I know multiple people in the US who have needed a COVID ICU bed, and they certainly weren't paying $100k out of pocket to do so. In most areas of the US, $100k could buy you a small house.
I've known of quite a few deaths of youngish people recently and only one was COVID related. Car crashes, ODs and other medical issues. Like I've known two girls both about 30 that died unexpectedly of non-covid medical issues last year.
You may be interested to see Kaiser Permanente's recent study, suggesting that more than one in 2,000 young men are experiencing untimely heart disease with a known cause: https://www.medrxiv.org/content/10.1101/2021.12.21.21268209v...
2) If you go into the ICU for Covid you're probably leaving via the morgue. The survival chance for a Covid patient in the ICU is a lot lower than the typical ICU patient.
Think of the number of hundred year floods you see reported on each year. Then look at the number of floodplains that your news source would report on...
I wonder if the 1 in 200 year example wasn't communicated very well; it could be the actuaries view a long-lasting 10% increase to be the 1 in 200 year event; it does sound low for a single year stress.
E.g. a "once in 200 years drought" in California might happen at the same time as a "once in 200 years over-mortality event" in Indiana.
News would tend to report on these, so we see many of these even though they are rare.
"Experts" making such a statement usually assume the variable in question to be standard distributed – which is close enough to the truth for non-extreme outcomes. But a lot of variables do not behave like the perfect standard distribution at all: due to non-linear effects and self-enforcing feedback loops, their distribution deviates more and more from the standard distribution the more extreme their values gets (they are "fat-tailed"). Referring to the n-sigma of such extreme events is plain and simple stupid, because there's no such thing as a standard deviation (or variance) for a fat-tailed distribution.
Obviously, we don't have other pandemics' data to lean on. But we did have the economic crisis circa 2007 - 2008. There was plenty of analysis about the socio-economic impact of that event. That is, for example, poverty rate goes up, so does X, Y and Z.
If we can model a pandemic, can we not also - at least try - to mobel the impact of "the cure" and possible collateral damage?
I'm not saying that they're actively lying, but it seems some assumptions in these frequentist's numbers are just not correct.
I'm not a lottery player so I can't give a good estimate on the number of lottery winners, but for the major jackpots I'll guess many per year.
AFIAK we have no documented meteorite deaths--but it looks like the destruction of Sodom (of biblical fame) was a meteorite. While obviously we have no death toll it's obviously a *lot* of years of major lottery wins. The atmosphere stops most of the stuff but when something's big enough to get through it makes quite a boom. (Chelyabinsk was half a megaton but was high enough up the blast only caused harm by throwing broken windows at people. Tunguska, however was a few megatons and got low enough to be a city-killer. All it blew up was forest for probably zero deaths, but had it fallen 7 hours earlier the world would be a different place because it would have wiped out Leningrad.)
https://retractionwatch.com/2021/10/01/criticism-engulfs-pap...
Just last year a woman had just gotten out of bed when a meteorite came through her ceiling and hit her pillow where her head had been.
Do we have an actuarial crisis on our hands? We’ve seen the same thing in finance, disaster preparedness and other unrelated industries. We have “once in 200 years” events happening it seems far more often than once in 200 years.
And how does it even pass muster that a 10% increase in deaths would be a “once in 200 years” event. When has there ever been a 200 year period without major war, disease or disaster? What exactly are they smoking?