Where are the insurers, yet again....
I've been asking this question since 2008, when ZIRP took down insurance and pension funds INTENTIONALLY. Why were the insurers silent? They're a HUGE and RICH industry, with plenty of lobbyists and influence. They specialize in quantifying and predicting. They understand compound interest and exponential curves better than anyone else. They avoid bad models and stupid assumptions, because bad models are unprofitable. Profit comes from agreeing with reality, which makes insurance the most realistic and scientific of all industries. But they allowed ZIRP to continue forever.

This article by a RETIRED actuary compares the AIDS panic with this year's "virus" holocaust. He gets everything right, with an insider perspective.

Best of all, he doesn't play the stupid People can't estimate risk game.

In both cases the virus was largely confined to specific populations, and EVERYONE KNEW IT. There was never any reason to assume "equal opportunity". Viruses are specialists.

I spent the next several months developing mathematical models of the spread of infection, and applying them to official health statistics, which were provided under free subscription by the Centers for Disease Control in their Weekly Surveillance Report. And, like anyone who has worked with epidemiological models during an emerging infection, I came to understand that early-stage projections are not neutral; they have an intrinsic and marked tendency towards exaggeration of whatever threat they’re applied to.

The reason is that with any new health condition, early infections and deaths naturally occur among the most susceptible parts of the population. With AIDS, there were clearly-defined and relatively small groups of people who were at very high risk, and almost all of the early cases were among members of those groups. As the disease spread to the much larger lower-risk parts of the population, overall rates of infection and death fell significantly.

When unrepresentative infection and death rates derived from early data are projected into the far future their effects are greatly amplified, just as a rifle fired at a distant target will turn a tiny error in aim into a miss by miles. And once the projected rates have been translated into numbers of deaths for a population of millions we end up with apocalyptic forecasts that can’t help but induce panic.

Many scientists spend their careers searching for eye-catching results, and it must be extremely difficult to choose to tone down the few that do occur, especially when they apply to a novel and high-profile disease. The temptation to believe you’ve discovered a genuinely awful and important truth is a powerful one. The Royal College of Nursing certainly couldn’t resist: in 1985, they predicted that one million people in Britain would have AIDS within six years. But by 1990, the cumulative total was less than 5,000.

In both cases the insurers knew that the EXPONENTIAL projections were wrong and destructive, but they didn't step up to resist.

ANY TIME YOU HEAR AN EXPERT CLAIMING THAT A NATURAL PHENOMENON IS EXPONENTIAL, YOU KNOW INSTANTLY AND PERFECTLY AND TAUTOLOGOUSLY THAT THE CLAIM IS WRONG AND THE EXPERT IS A MURDEROUS CRIMINAL. NATURE IS NOT CAPABLE OF DOING EXPONENTIALS.

Silence can't be good for profits. In 1980, and even more now after Romneycare, insurers are the main payers for medical care. When projections are wrong, insurers will spend more for unneeded tests and appointments for people who really didn't need to worry. And in the current holocaust insurers will end up spending HUGELY more for serious cancer treatment, which would have been cheaper if caught early.

I'm glad THIS actuary (RETIRED) chose to use his SKILL to clarify the situation.

But the question remains: Why didn't the insurance companies speak out IMMEDIATELY at the time when their authority and lobbying could have made a difference? They could have saved a whole lot of expense for themselves, and could have saved MILLIONS of lives in the current holocaust.

For insurers, profit and saving lives are PARALLEL goals. In earlier decades insurers often lobbied for regulations to improve safety and health. Home and business insurers have always helped customers avoid theft and fire and other hazards. Auto safety regulations were started by an insurance-financed research project in 1956. Fuckhead Nader managed to put his brand on the project for self-aggrandizement, but it was really a cooperative effort by insurers and universities.

Labels: Leth, Real World Math

  ¶ 6:10 AM