Part VII 
Monday, April 3, 2006, 06:18 PM
Yesterday I sat in the lecture hall for a quiz in Actuarial Statistics. It's became rather obvious that I would fail (I could only attempt about 25% of the paper) but I realised that I was rather blase about the whole thing. I had gotten to a stage in my education where I just didn't care.

Thinking about this I became rather disturbed. Why should I not care that I failed a quiz? I'd get rather ticked off at getting another FB on my IAA exams but I'll just shrug it off and enroll again next session.

So If I can pass that off with such nonchalance, why can't I just shrug off my past failed relationships - instead of letting them linger on in my mind, haunting me and potentially sabotaging my future success rate?

I've met quite a few people who are of the opinion, if it doesn't work out, it doesn't work out. You win some, you lose some. Just as long on average the result is positive, life is profitable.

But for me, I'm determined to minimise my loss ratio. Honestly, it's hard to keep putting up the premium to shore yourself up after a particularly bad experience. Obviously my utility function is skewed such that losses are much worse than gains.

What should I do? Do I find a certainty equivalent and settle? Or do I take a actuarially fair gamble and risk it all?

That's a question the actuary has to ask herself.

[ 798 comments ] ( 19757 views )   |  [ 0 trackbacks ]   |  permalink  |   ( 2.9 / 1679 )
Part VI 
Saturday, April 1, 2006, 07:22 PM
Working on yet another claims experience analysis I cam to the conclusion that I am rather obssessive. Though it should be fairly routine as there's not that much to finding the value of IBNR's, I'm always looking for things to pick on. I got rather cranky that I didn't have enough data about the fund to run a 'complete' analysis, the history which was so complex I was uncertain how to put it together.

On the train mulling this, I figured that my approach to claims experience analysis is identical as my apporach to men. I always think about the one experience I'm analysising and worrying about past events, unsure of how to report my results to get a good forecast on the future. Sometimes I would get so engrossed in a trivial thing like calculating the average amount of GSC claims I would lose sight of the big picture.

But at the end of the day at work, feeling irritated that I haven't gotten through it, I have to shut down my computer - and I realise that I need to do that too with men.

Like work, you have to make sure that obssessing over relationships doesn't overtake your life. And though my work is something that keeps me going day by day, I must always maintain enough perspective to step back and take in the big picture.

After all, in the end, it's just another claims experience analysis. And no matter how thrilling it is, it's just a part of all that is out there - there are valuations and pricing to be done!

And though the last time I totally made the wrong assumptions and set my parameters incorrectly, I must remember; it's just another claims experience.


[ 882 comments ] ( 8309 views )   |  [ 0 trackbacks ]   |  permalink  |   ( 3 / 372 )

Back Next