Monthly Archives: July 2012

Credentials

DW at Feed on My Links provides the following:

 

 

 

 

 

 

 

 

 

 

 

Certainly true in the actuarial profession. But the value of certification grows as you get older, after you’ve been laid off. (Happens to the best of us, kids. It’ll probably happen to you, no matter how good you are at your job. As Mae West once said in a different context, “Goodness has nothing to do with it.”)

If you’ve been an actuary for, say, 20 years and lose your job, you’re much better off with a credential, if only because your job interview won’t include the sticky question, “Why didn’t you become a fellow?”

And for older actuaries, it’s not unusual to move into a consulting environment, either on your own or hooked up with another firm. And clients want to see the credential, if only to justify to their bosses why they hired you. And if you aren’t credentialed, it will be very hard to justify your ever taking a lead on a project.

A couple weeks ago I spent an hour defending one of the hardest-working, most talented actuaries I know. (Close friends know who.) The entire discussion centered on whether:

a) He’s really that good, given he lacks a credential.

b) Whether the lack of a credential hurts the firm.

No bad guys here. Those are legitimate questions, and the guy got hired, so everybody’s happy.

But harkening back to the Venn diagram, the guys in red have a big edge on the guys in blue. You can call it signalling. I call it fact.

Wish the world to put together differently, but it’s not.

DW offers a bunch of interesting thoughts on the value of a certification. It’s all interesting, and I agree with a lot of it, so take a read.

I’d just add: Learn to play golf.

Fracking and risk management

Old Milliman friend Richard Soulsby forwards his article (with Jason Kurtz and Bhavini Kamarshi) on fracking and risk management.

Fracking creates a big, tricky environmental exposure. Shooting chemical gunk into the earth at rocket speed could contaminate groundwater. As an analogue, MTBE contamination of Santa Monica’s water supply ended in a $120 million settlement. (There are air pollution concerns, too.)

From society’s P.O.V, optimal risk management practice would be safety protections – following best practices on how to drill safely, accompanied by insurance that covers the liability from an accident.

But fracking companies have cheaper solutions: Continue reading

How many cat models do you need?

Above I steal the headline from this Susanne Sclafane piece, with the money quote:

. . .Bill Keogh, president of EQECAT, said that while reinsurers were early adopters of models—and multi-model approaches—insurers are now recognizing “that you can’t optimize to one model because you become subject to model change—and that can throw off your whole capital structure.”

Keogh also said the overriding purpose of a multi-model approach is for insurers and reinsurers to develop their own views of risk. “If you have multiple models, the first thing you have to do is understand why are they different—and as you explore that difference, you begin to have your own perspective on the risk,” he said.

I’ve often thought cat modelers should be like TV weathermen. The weatherman consults a variety of models, knows the strenghts and weaknesses of each, then comes up with a forecast that he or she explains in laymen’s terms.

That implies that most companies should run more than one cat model.

Higgs boson explained

Because lots of people expect actuaries to know about these things.