Theory | wealthymatters

The Dangers Of Predictive Analytics In Life And Health Insurance

June 13, 2019 Leave a comment

wealthymatters Currently the health and life insurance products we buy are static in the sense that right at the beginning of the policy term the insurance company makes an assessment of the morbidity or mortality risk of the person and then agrees to insure them at agreed-upon rates.

Now imagine a scenario of continuous health monitoring and a dynamic premium that reduces when people engage in what is deemed healthy behaviour. A scenario where the insurer provides various “incentives” like discounts on gym memberships , wearables like fitbit and preventive healthcare check-ups etc.

The first time I came across such an idea,2 lines of thought came to my mind simultaneously: Read more of this post

Filed under Paper Assets, Theory Tagged with BMI, corporate wellness program, data, dynamic premium, group insurance, group insurance premium, health insurance, Insurance, life insurance, morbidity, mortality risk, postaday, predictive analytics, privacy, universal accessibility to health insurance, wearables

AI Driven Personalized Life Insurance Premiums; Aye Or Nay ?

May 28, 2019 Leave a comment

wealthymtters The mortality risk is not the same across different sections of the population.So one of the ways in which life insurance companies have traditionally competed is by restricting their offerings to people who have lower risks of dying early and thus keeping premiums lower and/or bonuses higher.The classic example is the Postal Life Insurance plans of the past that were offered exclusively to government servants vs similar plans of the LIC that were open to all. In more recent times,insurance companies target the more educated, affluent, urban ,financially successful professional/managerial class with better living standards and access to world-class healthcare.

Insurtech powered by AI can increase the ability of life insurance companies to make fine distinctions in mortality risks, resulting in more risk classes .So one of the merging trends in life insurance is the increasing number of risk classes as insurers seek to better match risk with premiums.Thus in theory, rather than dozens of risk classes, thousands of risk classes or even lakhs of risk classes are possible. In fact if the AI is astute at risk classification, its possible that each policyholder would be in his/her own risk class. In other words, we would have personalized premiums,designed and calculated on a custom basis for each insured person. Read more of this post

Filed under Paper Assets, Theory, Tool Kit Tagged with adjustable premium, AI, An Estimate of the Degrees of Mortality of Mankind, annuities, Artificial Intelligence, Artificial Intelligence in Insurance, Drawn from the Curious Tables of the Births and Funerals at the City of Breslaw, Edmond Halley, Endowment Plans, group average statistics, Insurance, Insure Tech, LIC, life insurance, mortality risk, personalized life insurance premiums, postaday, postal Life Insurance, predictive analytics, risk classes, risk classification, risk pooling, risk sharing, survival benefits, term insurance, ULIP, Universal Basic Income, variable premium, Whole of Life Plans, with an Attempt to Ascertain the Price of Annuities upon Lives

A Curious Phrase To Remember A Lesson Never To Be Forgotten

May 27, 2019 Leave a comment

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Tarachand Ghanshyam Das was a Marwari Business that operated from 1791 to 1957.It enjoyed such prestige and credibility that its Hundi was negotiable through multiple offices and accepted by moneylenders and traders across the country.The Birla family got its start in Calcutta as sub-agents to this firm.

Bugotee Ram,the ancestor of the Poddars of Tarachand Ghanshyam Das was the treasurer or the Fotedar of the nawab of Fatehpur, Rajasthan. Their family name is a corruption of this title of Fotedar. Bugotee Ram was also a banker to the royal families of Jaipur, Bikaner, and Hyderabad. The Poddar family originally belonged to Churu in Rajasthan. When the local thakur imposed heavy tax on the wool trade, in 1791, the Poddars moved to a village in the domain of Raja of Sikar and named it Ramgarh.

Call It Chance , Call it Fate …….

April 21, 2019 Leave a comment

There is an element of Skill, Smart Work, and of course Hard Work behind any Fortune.And Prudence definitely helps in making and hanging onto it.But there is really another big variable……call it Chance or Fate……a combination of events that might just never again be repeated.Perhaps they are unique events meant to happen to the individual,or its all just random…..Nothing illustrates this better than the following series of events from Ramkrishna Dalmia’s life.

Ramkrishna Dalmia grew up in penury in Calcutta during the 1930s’ Depression.He was twenty-two when his father died and he had to support his mother, grandmother, three sisters and his wife in a single room that he had rented for Rs 13 per month. He was desperate to get rich quickly.

He speculated in silver and lost and suffered the humiliation of defaulting on his debts. Declared insolvent, he became persona-non-grata in the bazzar. Read more of this post