The Not Unreasonable Podcast

D&O Insurance with Danny Hojnowski

Wed, 10 May 2023 09:00:00 -0400

Danny heads up D&O, E&O and Cyber in the US for Trans Re, one of the market leaders in each line.

In this episode we run through all the big issues in D&O:
-Silicon Valley Bank and bank runs and how Directors and Officers liability underwriters are incorporating lessons

Dana Hojnowski’s favorite claim. (0:00)
What’s wrong with securities fraud allegation? (2:42)
How do you know when a company is violating their duty of care to their shareholders? (5:14)
What are the lessons learned from Silicon Valley Bank as an underwriter? (7:51)
What would happen if a company didn't buy D&O? (9:36)How is the US different from other countries in D&O litigation? (13:00)
D&O and crypto (15:13)
The resolution of the D&O puzzle of Special Purpose Acquisition Companies (SPACs)? (18:28)
Where has insurance made better risks? (24:19)
The cyber loss is going to come from someone trying to hack you -. (25:59)
How did you get into this kind of business where you're from? (28:11)

youtube: https://youtu.be/6XLjsp67UFE

Twitter: @davecwright
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Social Science of Insurance Essays

Death Spirals and Other Selection Problems with Amy Finkelstein

Mon, 30 Jan 2023 21:00:00 -0500

Amy Finkelstein is Professor of Economics at MIT. Amy’s research focuses on market failures and government intervention in insurance markets and she has won numerous awards include a MacArthur Fellowship and the John Bates Clark Medal. Amy is co-author with Liran Einav and Ray Fisman of the forthcoming book: “Risky Business: Why Insurance Markets Fail and What to do about it”.

Buy the book
https://www.amazon.com/Risky-Business-Insurance-Markets-About/dp/0300253435/
Amy on wikipedia
https://en.wikipedia.org/wiki/Amy_Finkelstein

episode on youtube: https://youtu.be/nvVlNSolE3s
show notes: https://notunreasonable.com/?p=7706

When is government compelled insurance a good idea? 0:02
How the public option or the mandate can create two different equilibria in the market. 8:53

Dental insurance isn’t really an insurance product. 13:27

The subsidy is not an objective, it’s a problem. 19:18

How do we choose whether to pay attention to some of these issues or not? 25:47

Why do we feel compelled to act when people are suffering from chronic conditions? 29:53

What are the benefits of giving people cash instead of insurance? 33:44

The problem of moral hazard in insurance. 39:51

The concept of affinity and intermediation. 45:28

Insurance can be learned the hard way. 51:02

What happens when the price of insurance gets too high in compulsory markets. 54:46

Why nobody ever wants to buy insurance. 1:01:06

Some of the studies that contradict what you think you know. 1:05:23

Twitter: @davecwright
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Pricing Insurance Risk With Steve Mildenhall and John Major

Sat, 07 Jan 2023 22:00:00 -0500

Nobody knew how to price volatility until now. I bet you're surprised!

This isn't hyperbole, Steve Mildenhall and John Major have a deep and thorough understanding of all the relevant literatures and have been part of a loosely collaborative team of academics and actuaries working out the details of a coherent, actionable theoretical foundation for pricing insurance for their entire careers. Now that they're both retired they've delivered us the tome the actuarial profession needs.

Their new book: *Pricing Insurance Risk: Theory and Practice* is an absolute masterpiece. It is theoretically sound and immensely practical. Until today no financial institution could choose a sophisticated portfolio model that wasn't hiding biases or inefficiencies that had to be 'band-aid-ed' over with coarse heuristics. Very importantly how does one calculate the margin required to service the capital base when the risks vary so much? The science of managing a portfolio of incompletely diversified, highly volatile financial instruments has gained serious ground with this book.

Steve Mildenhall is head of analytics at Qualrisk, an Insurance consulting firm, formerly assistant professor of actuarial science at St. John's University, and before that CEO of analytics at Aon. This is Steve's fifth appearance on this show. John Major is principal at Major analytics and the former director of actuarial research at guy carpenter.

youtube: https://youtu.be/ZQHpMVH7d9s
show notes: https://notunreasonable.com/?p=7694

Steve and John did a tutorial on this material and more with some technical examples you can see here: https://www.youtube.com/@ermdiner/
Here is a link to the spreadsheet used in the tutorial:
https://docs.google.com/spreadsheets/d/1CV3sF52cjPH8mw6T4E-jOfCNDagCptRs4xBZTug8Z0A/edit?usp=sharing

Here are some Not Unreasonable Podcast Episodes about related content:
Samir Shah on Innovating Capital
https://www.buzzsprout.com/126848/8171216
and
Steve on the Macro History of insurance Part 1:
https://www.buzzsprout.com/126848/8121657
And Part 2
https://www.buzzsprout.com/126848/8507268

In the show we cover:
How do you think of the cost of running the capital side of insurance?
2:06
The importance of connecting the value to the value of the original customers.
5:18
What is the value of reinsurance?
7:34
The timing of Hurricane Andrew relative to the early cat models.
18:44
The history of cat models in the 60s.
21:22
What the CEO’s are disagreeing about in volatility?
33:04
What could possibly justify 50% margins in these companies?
42:59
What doesn’t make sense about the intentionality argument.
46:28
What is the market price for risk?
48:02
The difference between allocating capital vs. allocating margin.
1:01:39
What’s the right metric for determining performance of a reinsurance company?
1:08:07
The further removed you get from loss, the cheaper the capital is as a percent of capital, but the more expensive the insurances are.
1:22:59
How long did it take for these ideas to emerge? How did they evolve?
1:24:55
The key to unlocking a lower cost of capital
1:29:07
What is the required return in a regulated environment?
1:32:55
The amount of leverage you get is huge.
1:48:24
Steve’s envelope theorem and how it works.
1:53:18
What’s the insight that underlies the ability to determine bounds for spectral measures?
1:56:46
Characterizing the worst risk-adjusted expected outcome.

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Mark Friedlander on Florida's Insurance Overhaul

Tue, 20 Dec 2022 16:00:00 -0500

Mark Friedlander returns to talk through the changes to Florida's insurance laws. It's just about the most comprehensive reform anyone could imagine, even if all it does is put Florida residents on a similar footing to many other states!

Assignment of Benefits Removal won’t be enforced until January 1, 2023.
3:35
What’s the risk of a political backlash from insurance companies?
8:52
The problem with the May special session was the senate was willing to take the similar steps that were just passed, but the House leadership was against it
13:38
What’s next for reinsurance in Florida?
16:59
How does the legislature pre-commit to not going “crazy” in 10 years?
19:51
What are the policies that go to citizens and there are some changes to citizens as well?

DaveDeMott of Stories of Florida Insurance
https://www.buzzsprout.com/126848/11840226
Gary Mormino on Social History of Florida: https://www.buzzsprout.com/126848/11848870
Mark Friedlander on Problems with Insurance in Florida: https://www.buzzsprout.com/126848/11582094
Joe Petrelli on Rating Florida Insurance Companies: https://www.buzzsprout.com/126848/11547382

youtube: https://youtu.be/8Bfkrbiazxw
show notes: https://notunreasonable.com/?p=7667

Twitter: @davecwright
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Gary Mormino on the Social History of Florida

Thu, 15 Dec 2022 18:00:00 -0500

Do you think Florida is weird? Most everyone does. Why? Gary is the man to answer this question. Gary is Professor Emeritus of the University of South Florida and has dedicated his career to studying the social history of Florida.

Here is Gary on wikipedia
Here is Gary on Amazon

Quote of the show: "Do crazy people immigrate to Florida or do perfectly normal people come here, and then be a little goofy and go crazy."

What is the most unusual social characteristic of Florida? 0:00
What are some of the most distinctive features of Florida? 9:37
Florida’s “Florida Man” reputation. 15:49
California and Florida are neck and neck in population density growth in last 100 years. 24:51
Florida is running out of options for reinsuring barrier islands. 35:55
What it costs to live on the coast in Florida. 40:18
How is Florida a Ponzi State? 42:28
What’s the real alternative? 46:55
What are the similarities and differences between Florida and other states in terms of immigration? 53:49
How the Cuban vote has been a solid republican vote since 1961

show notes: https://notunreasonable.com/?p=7659
youtube: https://youtu.be/WT0iS-sDa54

More on Florida:
Dave DeMott's Stories About Florida Insurance: https://www.buzzsprout.com/126848/episodes/11840226
Mark Friedlander on Problems with Insurance in Florida: https://www.buzzsprout.com/126848/episodes/11582094
Joe Petrelli on Rating Florida Insurance Companies: https://www.buzzsprout.com/126848/episodes/11547382

Twitter: @davecwright
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Social Science of Insurance Essays

Dave DeMott's Stories About Florida Insurance

Thu, 08 Dec 2022 19:00:00 -0500

Dave DeMott is President-Elect of The Florida Surplus Lines Association, Chair of the Legislative committee and sits on the national Wholesale & Specialty Insurance Association committee.
Most importantly for today, Dave DeMott is a real, legit, on-the-ground insurance practitioner in Florida. He gets into the real details and war stories about insurance claims in Florida.

Dave’s introduction to the Florida insurance market. 0:00
What is a lodestar fee multiplier? 5:23
The problem with AOB 12:29
What work is being done to curb predatory behavior by carriers? 19:03
Water damage and leaky roofs 23:15
What’s the distinct about Florida? 29:28
Lobbyists have their golden opportunity.

youtube: https://youtu.be/G7iGuLLZNwk
show notes: https://notunreasonable.com/?p=7654

More on Florida:
Mark Friedlander on the Florida Insurance legislation of Dec 2022
https://www.buzzsprout.com/126848/11907447
Gary Mormino on Social History of Florida: https://www.buzzsprout.com/126848/11848870
Mark Friedlander on Problems with Insurance in Florida: https://www.buzzsprout.com/126848/11582094
Joe Petrelli on Rating Florida Insurance Companies: https://www.buzzsprout.com/126848/11547382

Twitter: @davecwright
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Joe Edelman on Designing Meaningful Things

Fri, 28 Oct 2022 06:00:00 -0400

I worry about whether we can improve the insurance system. I once wrote an essay arguing that all insurance is compelled, so the only way to get someone to buy insurance is to force them to do it. The implication is that nobody will ever do anything good without being forced. We learn some lessons the hard way but then quickly forget. What's more we hate this compulsion! We chafe at the rules and many of us shirk them when we can. It's a mess.

Joe Edelman has a better vision. In his vision (in my words), we have values that give us a sense of meaning. Connecting with other people who share these values is (should be) our social objective. Groups anchored around values will develop norms for deepening the pursuit of these values, norms we'd gladly accept because the values are so meaningful to us.

Norms are another way of saying "social rules we live by" and the minute you are putting rules down you are constraining some actions and, even if only by negation, compelling others. If we can create a system where rules are embraced rather than resented, we can create a vastly superior society than we have today. Listen for our discussion of this!

Joe's homepage: https://nxhx.org/
youtube: https://youtu.be/Sjennrn5LNA
show notes: https://notunreasonable.com/2022/10/28/joe-edelman-on-designing-meaningful-things

Twitter: @davecwright
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Mark Friedlander on Problems with Insurance in Florida

Thu, 27 Oct 2022 17:00:00 -0400

Mark Friendlander is Director of Corporate Communications at the Insurance Information Institute a think tank focusing on insurance education. In this episode we dig into a bunch of detail of the ways in which the insurance ecosystem in Florida is doing Floridians harm and why the world is like that.
What are the root causes of the fraud in Florida?
What are the outcome?
What happens if nothing changes?
What are some special powers you have as an insured in Florida and how are they ultimately harmful?

youtube: https://youtu.be/g63n9Kgq4CY
show notes: https://notunreasonable.com/?p=7641

More on Florida:
Gary Mormino on Social History of Florida: https://www.buzzsprout.com/126848/episodes/11848870
Dave DeMott's Stories About Florida Insurance: https://www.buzzsprout.com/126848/episodes/11840226
Joe Petrelli on Rating Florida Insurance Companies: https://www.buzzsprout.com/126848/episodes/11547382

Twitter: @davecwright
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Social Science of Insurance Essays

Joe Petrelli on Rating Insurance Companies in Florida

Sat, 22 Oct 2022 08:00:00 -0400

Joe Petrelli founded Demotech, the rating agency that dominates the solvency assessment market for Florida's homeowners insurance market. This year (2022) he has found himself the bearer of bad news: that many of Florida's domestic insurance companies have not met Demotech's standards. At least six insurance companies went insolvent this year with others being downgraded, which meant that many thousands of Florida residents have to scramble to get their insurance replaced.

I should note that all of this happened before Hurricane Ian, the costliest hurricane to make landfall in Florida's long history of landfalling hurricanes. What's going on in Florida? Joe is here to talk about it!

youtube: https://youtu.be/Cd9JpHsjDr8
show notes: https://notunreasonable.com/?p=7636

More on Florida:
Gary Mormino on Social History of Florida: https://www.buzzsprout.com/126848/episodes/11848870
Dave DeMott's Stories About Florida Insurance: https://www.buzzsprout.com/126848/episodes/11840226
Mark Friedlander on Problems with Insurance in Florida: https://www.buzzsprout.com/126848/episodes/11582094

Twitter: @davecwright
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Social Science of Insurance Essays

Brian Nosek on the Gap Between Values and Actions

Sat, 08 Oct 2022 07:00:00 -0400

Brian Nosek, has been at the center of the two most important recent social revolutions in academia. First is implicit bias where Brian co-founded Project Implicit http://projectimplicit.net/ based on a pretty incredible idea: that we don't do what we say we value. The concept of implict bias has really taken off and the practice of implicit bias detection and training has gone "way out in front of the research" as we discuss.
While he was busy kicking off a fundamental change in our society (felt very strongly in academia) he decided to upend (and massively upgrade) the culture of research itself by discovering that huge swaths of empirical research fails to replicate. I'm no academic but I would find this terrifying if I was. As Brian says in the interview: "in some fields, people still don't like it an email from me" because that means he's about to try to replicate their work!

How was Brian able to pull all this off? There's even a technology innovation hidden in all this that makes his work possible. He's a true innovator and an honor to have him on the show!

show notes: https://notunreasonable.com/?p=7611
youtube: https://youtu.be/NkKuF--5V60

Twitter: @davecwright
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Jen Brady of Oasis Gives me Hope

Fri, 05 Aug 2022 12:00:00 -0400

This conversation gave me such a feeling of humility yet hope about our world. It's an awful place sometimes but some people are truly awesome at making it better.

Jen Brady is the Executive Director of Oasis, a non-profit serving women and children in Paterson, NJ and this is her second appearance on the show. In the first show we talked about COVID and the poor. This time we're digging right onto Oasis and its mission and how it's doing.

Charity is incredibly similar to insurance. As I half joked once in comparing them: "One of them supplies resources to those in desperate need and hopefully enables them to pull themselves out of their difficult circumstances to lead a successful life. So does the other one." Insurers could do well to learn from Jen. And she has a remarkable track record, doubling the size of Oasis during her tenure and initiating many fascinating experiments and new initiatives in Paterson, NJ.

We discuss:
* How self-belief is the most important factor in women lifting themselves out of poverty
* How that feeling of self-belief is constructed, influenced and nurtured in and out of Oasis
* The difference between generational poverty and immigrant poverty
* What is the drop out rate (I was astonished) and how do they manage drop-outs
* Do the problems feel endless?
* What did they learn by extending Oasis into housing development?
* How to not create bureaucracy in solving problems
* How they handle the cultural complexity of women and children from 26 different countries (plus Paterson natives!)
* How the social consequences of COVID (lockdowns, etc) impacted poor families
* How much talent there is hidden in places like Paterson

show notes: https://notunreasonable.com/?p=7567
youtube: https://youtu.be/aWS7tSIe68Q

Twitter: @davecwright
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Chris Blattman on Why We Fight

Fri, 10 Jun 2022 22:00:00 -0400

Chris Blattman is an economist and political scientist and author of several books, most recently *Why We Fight: The Roots of War and the Paths to Peace*.

This is another installment in my investigation for how to pursue social change. What I notice about insurance is that the institution is so deeply encoded in our society that we don't even realize how important it is. So deeply encoded that we actually kind of hate it, yet it persists because of how important it is.

What are other ways of pursuing beneficial social change? Persistent beneficial social change? Violent conflict is a pretty big, nasty problem. But what are its roots and what are its causes? What might need to change about our world to reduce it? What is the relationship between peripheral and central societies and how is that related to violence?

All that plus tons on James C Scott and more!

youtube: https://youtu.be/H-bcj1LJy80
show notes: https://notunreasonable.com?p=7498

Twitter: @davecwright
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Tyler Cowen on Talent

Tue, 17 May 2022 00:00:00 -0400

Tyler Cowen is an economist, author, podcaster, venture and philanthropic sponsor. Tyler is one of my intellectual heroes, this is his third appearance on this program and we'll be anchoring this discussion around his new book *Talent: How to Identify Energizers, Creatives, and Winners Around the World* co-authored with Daniel Gross.

Tyler blogs at marginalrevolution.com (I've been reading it every day for about 15 years) and hosts the only must-listen podcast in my player: Conversations with Tyler. Tyler is an inspiration!

In the show we talk about:
* Why the book deserves to succeed in a moral sense
* Is Tyler moving away from academia?
* What do I think the main connection is between Tyler and Daniel and how it informs this book?
* What is the goal of writing this book?
* What is the most important academic result... (ironic, I say!)
* Why should Tyler's podcast guests be scared?
* Is bias good or bad?
* The list of tools available to those in power law businesses has grown!

Book link:
https://www.amazon.com/Talent-Identify-Energizers-Creatives-Winners/dp/1250275814

show notes: https://notunreasonable.com/?p=7478
youtube link: https://youtu.be/mr2jrM0fkt0

Twitter: @davecwright
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Howard Kunreuther on Behavioral Economics of Risk

Fri, 22 Apr 2022 12:00:00 -0400

Howard Kunreuther is the foremost authority on applying behavioral economics to unlikely, high consequence events. I remain astounded that Howard's teachings are not part of the educational canon for all insurance professionals. This is important stuff!
In this episode we discuss:
* Cognitive bias and how it impacts society generally and insurance in particular
* How we might overcome cognitive bias in our decision making
* Prioritization of risk
* How politics really is the mediating force for discussing risk
* Does voter irrationality give us cause for hope?

show notes at:
http://notunreasonable.com/?p=7470
youtube link:
https://youtu.be/wxSsddUAIFU

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Robin Hanson on Distant Futures and Aliens

Mon, 21 Mar 2022 11:00:00 -0400

Social science is brutally hard to do well. I once got a guest to admit there has been no progress on it ever and another one to say that moral progress is literally impossible. I think there's a deeper link to morality and social science than most so this is depressing stuff for me. This episode was part of an effort of mine to get back to first principles. But, uh.. what ARE the first principles of social science? Enter Robin!

Robin Hanson is Associate professor of Economics at George Mason University and is back for his second appearance to talk about social science of very distant (in every possible sense of the term) societies. We have aliens, we have future humans, we have simulations. Robin speculates about things he can see today, things he thinks might happen in a century or two and even what might be going on in 1 million CE and perhaps beyond.

As a frame for the show I think of it as trying to reason about what is permanent about social life by thinking of things that are weird and distant. Robin immediately disagrees with my premise and we go from there. We always learn from Robin Hanson, people!

Show notes: https://notunreasonable.com/?p=7460
Youtube link: https://youtu.be/oYCEo3LnGFE

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Stan McChrystal on Risk and Leadership

Wed, 26 Jan 2022 15:00:00 -0500

Stan McChrystal retired as a 4 Star General in the US Army and has since founded the McChrystal Group, written four books and launched a podcast. Stan is one of the world's foremost scholars and practitioners of leadership and in this conversation we focus on his latest book, Risk: A User's Guide. As I say in the interview, I think this is Stan's most straightforward how-to guide on leadership and we dig very deeply into the nuanced and fascinating connection between leadership and uncertainty, including:
* What the history of military tactics can teach us about social progress
* How hard is it to manage Special Forces? Why might it be different than other branches of the military?
* When and why is Stan skeptical of using data to make decisions?
* How does uncertainty reduction help you judge a leader?
* How do we use morality to help guide us through uncertainty? Who are the best at this in the military?
* What kind of information is toxic to decision making?

And more! Show notes at:
https://notunreasonable.com/2022/01/26/stan-mcchrystal-on-risk-and-leadership/

Twitter: @davecwright
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Ga Bartick on How To Sell

Fri, 03 Dec 2021 15:00:00 -0500

GA Bartick teaches people how to sell an underappreciated skill with very general applications. GA wrote a book called Silver Bullet Selling and in this conversation we talk about
- how small organizations should scale their founders
- Has sales changed over time
- What is different about your industry?
- How to make an emotional connection
- How insurance is different!
- Big ticket vs small ticket sales
- Sales books are exemplary training manuals. How to teach, how to train?
- Is sales training generating results? How do we know?
- Do we hate practicing sales more than anything else?
- Does sales training change your life?

Show notes at:
https://notunreasonable.com/?p=7336

Twitter: @davecwright
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Scott Sumner on Monetary Policy

Fri, 19 Nov 2021 22:00:00 -0500

Scott Sumner is the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center at George Mason University and blogger at themoneyillusion.com and econlog and author of two books: The Midas Paradox and more recently, The Money Illusion.
Scott came to prominence because his work on the Great Depression (published in Midas Paradox) gave him analytical superpowers for understanding the Great Recession in real time in 2008 and 2009 and beyond and in retrospect. We've seen the monetary policy establishment move closer and closer to the views Scott has been trying to talk them into for over ten years.
Scott is one of those people who understands some very deep things about a very challenging subject. We can all learn from Scott!
In the conversation we cover:
- How might he design crypto monetary policy?
- What matters more, revenue or wages?
- Where does monetary policy end and fiscal policy begin?
- Why isn't the fed more politicized?
- How does Monetary Policy really work? How are inflation expectations set and how do they really matter?
- NGDP targeting and how Scott's view has changed on it

Show notes:
https://notunreasonable.com/2021/11/26/scott-sumner-on-monetary-policy/

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David Zuby on Crash Test Dummies

Sat, 06 Nov 2021 10:00:00 -0400

David Zuby is executive vice president and chief research officer for the Insurance Institute for Highway Safety and also a worldwide expert on crash test dummies! I found myself in an amazingly interesting conversation with David out in the field and pulled out my smartphone to capture it!
In this quick chat we discuss:
* the production economy of crash test dummies
* what the challenges are in designing them
* what are the limitations?
* how long do they last?
* Do you remember Vince and Larry!?

Show Notes:
https://notunreasonable.com/2021/11/26/david-zuby-on-crash-test-dummies/

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Craig Hupper on ESG

Mon, 25 Oct 2021 15:00:00 -0400

Craig is Head of ESG for Trans Re, a global reinsurance company and in this episode we dig into what ESG is about generally and what role reinsurers and the insurance industry plays today. In the episode we cover:
* Is Trans doing this for the good of society or just to raise rates?
* Is it just about catastrophe business?
* Does it just mean you'll make more money on non-ESG-consistent risks?
* What does a company that embodies the antithesis of ESG values look like?
* Is this just a marketing strategy?
* Is a marketing strategy actually a really good reason to do this, even in principle?
* Does it make sense to have a separate ESG committee?
* What on earth is the G about?

And much more!

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Joe Henrich on Cultural Evolution

Mon, 04 Oct 2021 15:00:00 -0400

Joe Henrich is Professor and Chair of Human Evolutionary Biology, Harvard University. He has written two books that have been incredibly eye-opening for me: The Secret of Our Success and the WEIRDest People in the World. Joe has put cultural evolution on the map as the best way for understanding why the world looks the way it does today.
In the interview we cover:
-How cultures are a statistical concept and what philosophers get wrong when analyzing culture
-What culture 'wants'
-What is the speed minimum of innovation?
-Are there things we can do to accelerate cultural evolution further?
-How should we analyze subcultures?
-Is Insurance really the fundamental application for culture?

Show Notes:
https://notunreasonable.com/2021/11/26/joe-henrich-on-cultural-evolution/

Youtube link:
https://youtu.be/ud-1rhQHnKE

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Mahbod Moghadam on Controversy

Mon, 20 Sep 2021 10:00:00 -0400

Mahbod Moghadam is the co-founder of Genius (formerly Rap Genius), co-founder of everipedia.org, and co-founder of ozone.ai.
My words but Mahbod helped build Genius by being a controversial guy online. Controversy does not make you universally loved and Mahbod has "had beef" with a whole slew of who's who in the tech business. Some of it was real, some of it was show, all of it was catnip for the press at the time!
Two brain surgeries and many years later and Mahbod strikes a very different tone about his life and approach to entrepreneurship. I wanted to talk to him because he's unique. I tried to steer the conversation towards Rene Girard's ideas which I thought might apply well to Mahbod's story. I still feel that way but it's hard to stay meta for long with Mahbod and we bounce in and out of his life narrative while covering the role of media in the construction of controversy, whether being controversial is a good idea even in retrospect, what it means to be an Iranian Jew in the tech startup world and don't worry, Mahbod hasn't jettisoned contrarian and original ideas entirely.
Enjoy my ride with Mahbod!

Show notes: https://notunreasonable.com/2021/11/26/mahbod-moghadam-on-controversy/

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Uwe Dulleck on Credence Goods

Tue, 07 Sep 2021 17:00:00 -0400

Uwe Dulleck is a leading theorist on Credence Goods, a class of economic good defined by the fact that consumers can't verify the quality of what they've bought. Think car mechanics or medical procedures. Or insurance!
Uwe's expertise doesn't end there of course and we talk about why people pay taxes, cybersecurity and some interesting ways Uwe has innovated on connecting academic work to real hard tech innovation.
I had never heard to credence goods until a few months ago and it astonished me that there was a whole corner of economic thought devoted to consumers figuring out who to trust to get the right deal for themselves. It's an incredible and, in a world of ever-increasing specialization, increasingly important concept!

Show Notes:
https://notunreasonable.com/2021/11/26/uwe-dulleck-on-credence-goods/

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Bryan Caplan on the Myth of the Rational Voter

Sun, 18 Jul 2021 10:00:00 -0400

Bryan Caplan is Professor of Economics at George Mason University and for Bryan's second appearance we're talking about how voters aren't all they're cracked up to be in terms of their ability to generate good electoral outcomes. I have two interests in this work for Bryan. First, it's pretty helpful to have a sober literature-backed investigation into voter behavior in an era when politics feels like it's getting ever less functional. Second, I think there some deep ideas behind this book that inform how we make decisions in daily life. Politics isn't only confined to the ream of government, after all!

Show notes:
https://notunreasonable.com/?p=7297

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Jessica Leong on Who Actuaries Are

Mon, 21 Jun 2021 12:00:00 -0400

Jessica Leong is the President of the Casualty Actuarial Society and the Lead Data Scientist at Zurich North America.
Jessica used her conversational Jiu Jitsu powers to make me talk a fair bit more than usual in this episode and it turns out I had some things to get off my chest about being an actuary!
We discuss:
-How do we define what an actuary is. There are different ways to approach this question!
-How might we have thought about the defunct CAS SOA merger?
-Are the exams getting harder? Why?
-The culture of being an actuary
-How does Jessica introduce herself at dinner parties?

Thanks for listening!

Show notes:
https://wordpress.com/post/notunreasonable.com/7299

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Steve Mildenhall on Insurance History Part 2

Wed, 12 May 2021 11:00:00 -0400

Steve Mildenhall returns to talk insurance history! Int his follow up to our earlier episode we dig even deeper into data by different line of business and observe all kinds of interesting things:
- which classes have more premium than claims volatility
- statistical vs narrative analysis
- how well can claims be forecast with prices?
- how did the industry do?
- which lines are more volatile and why?

Check out the youtube video for the slides:
https://youtu.be/HfF53eXFSGQ

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Doug Hubbard on How to Measure Anything

Thu, 29 Apr 2021 20:00:00 -0400

Doug Hubbard is the author of several books and I've read two: *How to Measure Anything* and *The Failure of Risk Management*. I can honestly say that one of my career goals is to implement his methodology into my job today and everything I do in the future. Here's an incomplete list of wow realizations that I had reading Doug:

That you can overcome cognitive bias in estimating variation
That we don't measure what's most important
That we can quantify the value of information
That we can quantify uncertainty and use it to make decisions
That expert opinion can be calibrated and aggregated and use in a quantifiable manner
That Bayesian statistics explain the reduction in uncertainty that accompanies additional information.

That last one is an *empirical* observation. I remain floored by that. Floored.

I didn't even cover half of what I wanted to cover with Doug. Read Doug Hubbard. Learn from Doug Hubbard. I will continue to!

Show notes:
https://notunreasonable.com/?p=7298

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Robert Hoekman on The Tao of User Experience

Tue, 13 Apr 2021 14:00:00 -0400

Since joining the technology business I've had a whole variety of mental upgrades but Robert Hoekman has given me the chance to dig into what may be the most profound of them all: design. In the world of software we are confronted all the time with how feeble our minds are when tangling with reality. I think that the core mistake at the heart of bad software is that we humans are pre-programmed to believe our own BS.
User Experience research lives and breathes human cognitive frailty and Robert Hoekman is an absolute master. He has written many books, in this episode we talk about The Tao of User Experience. A small, tidy phenomenal work that sits on my desk and from which I read nearly ever day.

show notes:
https://notunreasonable.com/?p=7320
youtube:
https://youtu.be/-lyxd9E4lJM

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David Soloff on O.T.T Risk

Fri, 26 Mar 2021 11:00:00 -0400

David is the founder of Ottrisk, a startup building technology to support the underwriting of business interruption Insurance. Previous to Ott-risk, David was a founder of Premise, a collector of ground truth data, where he remains Chairman, and co-founder of Metamarkets, acquired by Snapchat. David serves on the advisory board of Columbia University’s Institute for Data Sciences, was a punk rock musician in the 80s and almost got his PdD in Mediterranean archeology.

https://www.ottrisk.co/

https://notunreasonable.com/podcast

Show notes:
https://notunreasonable.com/?p=7317

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Clip - David Soloff of OTT Risk on the Opportunity in Business Interruption Insurance

Wed, 24 Mar 2021 13:00:00 -0400

This is a clip from my upcoming interview with David Soloff on the opportunity in business interruption insurance.

David is the founder of Ottrisk, a startup building technology to support the underwriting of business interruption Insurance. Previous to Ott-risk, David was a founder of Premise, a collector of ground truth data, where he remains Chairman, and co-founder of Metamarkets, acquired by Snapchat. David serves on the advisory board of Columbia University’s Institute for Data Sciences, was a punk rock musician in the 80s and almost got his PdD in Mediterranean archeology.

https://www.ottrisk.co/

https://notunreasonable.com/podcast

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Samir Shah on Innovating Capital

Fri, 19 Mar 2021 07:00:00 -0400

Samir Shah is Co-Founder and CEO of Ledger Investing, former Chief Reinsurance Office and Head of Capital markets at AIG. Samir started his career as a pension actuary and management consultant.
I came across Samir at the tail end of my reinsurance broking career and his business fascinated me.
If you were wondering why I've never gotten into a knock-em-down drag-em-out deepest dive imaginable into insurance capital and the constraints on innovating at the very tippy top of the chain, you are in for a treat.
If you listen closely to this you'll see that we actually slide into some serious heterodox territory on several occasions: are capital markets actually more efficient for taking risk? Are insurance results uncorrelated to other asset markets? Is insurance capital not a commodity? If these are suspect what is the key to unlocking a lower cost of capital for insurance?
Listen to see what Samir has to say!

Show notes:
https://notunreasonable.com/?p=7311
youtube: https://youtu.be/diERmzI7YSc

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Steve Mildenhall on The Macro History of The Insurance Market

Thu, 11 Mar 2021 10:00:00 -0500

This episode marks the return of Steve Mildenhall, principal at Convex Risk, former Assistant Professor of Actuarial Science at St John’s University and former CEO of Analytics at Aon. This time, Steve is bringing an amazing dataset that he has developed showing the longest sweep of history in insurance I have ever seen. You can see the deck we go through here. This show is probably best consumed as a video, which you can see here.

You can see show notes at notunreasonable.com.

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John Shettle on How to Sell Insurance

Thu, 10 Dec 2020 11:00:00 -0500

I talk a lot about selling these days and was reminded of this moment from my conversation with John Shettle where he launched into an impromptu tour de force sales lecture. This experience really stuck with me.

John was an operating partner at Stone Point Capital, a former CEO of specialty insurance MGA Victor O. Shinerer and held a variety of executive and leadership positions through is career. Sadly, I recently learned that John passed away last year. We all had a lot we could learn from John and I was very fortunate to have had a chance to capture some of it!

notunreasonable.com/podcast

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Otakar Hubschmann on AI In Reinsurance

Mon, 02 Nov 2020 10:00:00 -0500

My guest for this episode is Otakar Hubshcmann, Head of Applied Data at Trans Re. The reinsurance industry is absolutely FULL of interesting data about insurance but there are a bazillion challenges of standardizing the data so that even expert reinsurance underwriters can make sense of it, much less machines and models.
This is Otakar's world!
In the context of machine learning his is a modest objective, as he puts it:
"The idea that you could have a machine come in or set of algorithms or whatever, take over from someone that's been in the industry with a learn domain expertise and a set of heuristics that are sort of proven over time, that just is not going to happen maybe ever ".
But this is reality, folks. Most practical business problems really are beyond the frontier of what AI can meaningfully take over. All the more reason for companies to dig into the domain in house to figure out where the strategic gold is buried.

Show Notes:
https://notunreasonable.com/?p=7326

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Actuaries and Data Scientists at Root

Mon, 17 Aug 2020 08:00:00 -0400

My guests for this episode are from Root Insurance: Matt Bonakdarpour, VP of Data Science, Alex Carges, Chief Actuary and Isaac Espinoza, who leads Root's reinsurance efforts.

This episode covers everything that I, at least, have been burning to ask some people deeply steeped in the data science of auto rating. Does territory really matter? Does technology really matter? Actuaries vs Data Scientists? Do such distinctions matter in the limit?
Listen in for more!

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Alex Lazarow on Frontier Startups

Wed, 29 Jul 2020 07:00:00 -0400

My guest for this episode is Alex Lazarow, VC with Cathay Innovation and author of OUT-INNOVATE How Global Entrepreneurs–from Delhi to Detroit–Are Rewriting the Rules of Silicon Valley. In this show we discuss:

liberation of constraints
whether this is all survivorship bias (in either direction!)
How innovation hubs might compete with one another
How the Silicon Valley model can be both wrong and right
How frontier cultures can contribute or take away from startup success
How community minded entrepreneurs can be

And more!

Alex was a fantastic guest and like all of my most enjoyable interviews I was delighted to be surprised a few times by Alex's insights as he challenged me to learn even beyond my preparation for the conversation. Bravo, Alex!

Show notes:
https://notunreasonable.com/2021/11/28/alex-lazarow-on-frontier-startups

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Mary Hirschfeld on Aquinas and the Market

Thu, 02 Jul 2020 22:00:00 -0400

My guest for this episode is Mary Hirschfeld, Associate Professor of Economics & Theology at Villanova University. Mary has a PhD in Economics from Harvard University and a PhD in Theology from Notre Dame. Her book, Aquinas and the Market: Toward a Humane Economy, is the book we as a society need someone with that background to write. We talk about what an alternative universe of economics might look like if designed by the famed Catholic Theologian.

The cheap reading of her book can sound just like another bunch of self-help moralizing about us needing to consume less and live better. In our conversation I even challenge her a bit and say this isn't particularly newsworthy, so why write the book? Mary's mission is deeper, though, she's out there to give us some new, more effective intellectual arguments for *why* our lives should be lived better. Even though we may already be looking for more fulfilling pursuits than the old rat race there is a surprising lack of intellectual underpinnings to this set of ideas, especially the economics of these ideas. Mary Hirschfeld to the rescue. Let me know how you think she does!

This show is part of an on-again / off-again series I'm recording about the philosophical and moral foundations of economics. See my episodes with Tyler Cowen on Stubborn Attachments and Agnes Callard on What Philosophy Feels Like!

See show notes here!
https://notunreasonable.com/2022/01/07/mary-hirschfeld-on-aquinas-and-the-market/

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Ken Brandt on the Impact of COVID-19

Fri, 05 Jun 2020 17:00:00 -0400

Ken Brandt is the co-President of Global Underwriting at Trans Re and in this episode, recorded on June 3, 2020, we're talking COVID-19. In this episode we cover:

What are good and bad outcomes for the (re)insurance market, (they're surprisingly similar!)
How the insurance industry might get commandeered by the government to satisfy social aims
Ken's observations on working remotely for the past 20 years
What do we lose as a face to face industry with remote work?
How pandemics are insurable and more!

See show notes at notunreasonable.com/podcast

If you enjoyed this episode you'll probably also like other shows with reinsurance executives: Joe Taranto, Dinos Iordanou, Paul Ingrey, Mike Sapnar (Ken's boss!) and Bart Hedges

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How COVID Hits the Poor with Jennifer Brady

Wed, 25 Mar 2020 06:00:00 -0400

My guest for this episode is Jennifer Brady, Executive director of Oasis, a non-profit helping women, teens and children rise out of poverty in the greater Paterson, NJ, area, one of the poorest communities in New Jersey.

We cover how the lockdown is leading to record-breaking demand for meal support from Oasis, how much more vulnerable this population is to disease, both because of their physical circumstances and because, believe it or not, it is only one among many life threatening things to worry about, what the political implications might be if COVID-19 becomes a disease of the poor and, of course, what we can all do to help.

show notes at notunreasonable.com/podcast

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What COVID Might Mean For Insurance with Michael Tanzer

Mon, 23 Mar 2020 07:00:00 -0400

Michael Tanzer is a portfolio manager at a hedge fund called Callaway Capital and author of a newsletter I read each week call Stuff to Read Over The Weekend (STROTW). Michael asked me if we could hop on a call and talk about COVID and I thought I might try just putting this out as a podcast as an experiment. I might do more of these with various people as I struggle to make sense of this crisis, partly to get my own mind off the concerns I have for myself and my family. Let me know what you think!

We cover a lot of my own current thinking about how insurance responds to this crisis and also models for economic and market disruption and how COVID-19 fits into all this. It’s an insurance-style crisis hitting the border economy?

Show notes at:
https://notunreasonable.com/2022/01/20/michael-tanzer-on-covid-predictions-for-insurance/

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Christy Ford Chapin on the History of Health Insurance in America

Tue, 10 Mar 2020 18:00:00 -0400

My guest for the latest episode is Christy Ford Chapin, Associate Professor of History at the University of Maryland, Baltimore County. Christy wrote *Ensuring America's Health: The Public Creation of the Corporate Health Care System*, which covers in enormous detail the historical origins of the US Health Insurance system. The central thesis of the book is that the American Medical Association was the linchpin player in warding off alternative payment systems for healthcare in the US. It's a fascinating idea and also serves as an excellent excuse to tour the origins of our system today.

We cover much more including how hard it is to categorize the AMA's political stance in today's language, the variety of alternative systems in the early 20th century, how fraternal associations were the original insurers, whether the political diversity of the US was really to blame, whether Medicare would have been passed if JFK hadn't been assassinated and when the first worries about the cost of healthcare started to emerge.

Christy's homepage: https://history.umbc.edu/facultystaff/full-time/christy-ford-chapin/

Show notes:
https://notunreasonable.com/2022/01/10/christy-ford-chapin-on-the-history-of-health-insurance-in-america/
youtube: https://youtu.be/WlnYHVFwKhM

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Monica Mason on Catastrophe Modeling

Mon, 18 Nov 2019 22:00:00 -0500

My guest for this episode is Monica Mason, head of catastrophe analytics as Trans Re. Catastrophe modeling is an analytical field of insurance concerned with predicting the cost of all kinds of natural disasters: hurricanes, earthquakes, tornadoes, floods, wildfires, etc. We go very deep into the nuances of catastrophe modeling and touch on a few universal truths for complicated risk-taking businesses like reinsurance:

- How reliant should you be on external vendors for IP that could save or destroy your organization?
- What are the most valuable parts of these complex systems?
- How well do duopolists respond to customer needs?

This interview is one of a series of talks I recorded with reinsurance professionals at Trans Re after my initial show Trans’ CEO Mike Sapnar. I get really deep into reinsurance topics with black belts in various sub-domains: catastrophe modeling, reinsurance claims, medical malpractice, reinsurance underwriting and reinsurance finance.

This is not an intro course, folks, more like a post-doctoral fellowship. Podcasting is a fantastic medium to sink your teeth into the topics insiders themselves struggle with every day on the job and I couldn’t be more proud to celebrate the intellectual depth and sophistication of reinsurance with you all.

Show notes at:
https://notunreasonable.com/?p=7394

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Ty Sagalow on the Making of Lemonade

Sun, 22 Sep 2019 06:00:00 -0400

My guest for this episode is Ty Sagalow one of the founding members of the Lemonade Insurance Group. Ty has held various underwriting and product development position at AIG over his 25 year career there and served as Chief Innovation officer at Zurich North America and Tower Group before joining Lemonade as its first Chief Insurance Officer.

Ty wrote a book about his Lemonade experience called the "Making of Lemonade" which is the topic of the interview!

We cover all kinds of ground in the conversation (innovation, starting a company, what were some innovation failures in Ty's career) but I didn't take long to get to the heart of the matter. The thing that distinguishes many tech startups of course is that their technology is so great. What is that like?

Listen to the episode to find out and check out notunreasonable.com for more!

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Tyler Cowen on Big Business

Mon, 12 Aug 2019 01:00:00 -0400

Tyler Cowen, professor of economics, blogger at marginalrevolution.com, columnist for Bloomberg, host of Conversations with Tyler and author of numerous books returns to the Not Unreasonable Podcast to talk about his latest book, Big Business: a Love Letter to An American Anti-Hero.

All too rarely do you get a tour of how incredibly strong the evidence is that everyday truths are what they are: big business actually exists for a reason because it mostly does exactly what we need: provide goods and services at affordable prices with reasonably good service. What's more is that big business is the source of all kinds of benefits to America and to human society generally. It's even better than you think! In the show we cover:
- where businesses fit into the social intuition of the human mind
- similarities between how we treat famous people and big business and what another of Tyler's books, *What Price Fame* can teach us about big business
- What is good management and what effects does management have on employees?
- How the book is an American book and how it is NOT a Chinese book
- Crony capitalism doesn't exist here, but where might it exist in the world?
- Wall Street and Financial Dark Matter
- How Tyler views the firm

All this and much more! See show notes at notunreasoanble.com

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Melissa Perri on Escaping The Software Build Trap

Sun, 28 Jul 2019 22:00:00 -0400

This episode is about how to build an organization that itself builds great products, especially great software products. I am absolutely not exaggerating when I say that this is the most important and under appreciated topic in the world today. It will some day be impossible for a company to thrive without these skills and we as a society are still figuring out how to organize human enterprises into productive software-making machines. It does NOT come naturally and I believe Marc Andreessen when he says that software will eat the world.

That means that if your organization doesn't learn how to produce great software it, too, will be eaten and you along with it.

Melissa Perri lives at the cutting edge of software process design and runs a consultancy devoted to building great product leaders. This of course applies to non-software products but the day is approaching when there is no such thing as a non-software product. Listen to this episode and continue on your journey to being a better producer of software, either as a coder or as an enabler of the programmers that build the products your company sells!

Thanks for listening! Show notes at notunreasonable.com

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Alex Tabarrok on Innovation and The Baumol Effect

Mon, 08 Jul 2019 04:00:00 -0400

My guest for this episode is Alex Tabarrok, the Bartley J. Madden Chair in Economics at the Mercatus Center and Professor of Economics at George Mason University, blogger at Marginalrevolution.com, co-founder of Marginal Revolution University and co-author with Eric Helland of "Why Are The Prices So Damn High?" which is short, free book and which we discuss on the show.
Alex has written many other books and papers and there is a theme of thinking about innovation throughout his work. Several years ago he wrote a book on the topic called "Launching the Innovation Renaissance" which we also touch on as well as how the era of a country's birth affects its institutional makeup, how national rivalries can generate positive externalities (pop quiz: what was NASA's budget as a % of US GDP at its peak?), whether and why there has been a decline in innovation (and what's the difference between innovation, entrepreneurship and economic growth?), where we might look for a model of education reform and how we might get there (what would a hollywood-style investment in education reform look like?) including Alex's own observations in launching his own education platform (marginal revolution university!), and much more!

Show Notes:
https://notunreasonable.com/2022/01/07/alex-tabarrok-on-innovation-and-the-baumol-effect/

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Matt Moore on Analyzing Highway Safety

Mon, 17 Jun 2019 22:00:00 -0400

My guest for this episode is Matt Moore, SVP of the Highway Loss Data Institute. At HLDI Matt manages the research function for HLDI's massive insurance and automobile dataset. In this episode we leap to the cutting edge of AI in automobiles and learn about how well some key safety features perform, such as:

Front Automatic Emergency Brakes
Curve-adaptive headlights (Big surprise!)
Lane departure warning systems
Blind spot warning systems
Parking sensors
Rear cameras
Rear automatic emergency brake

In addition to rattling through those features and how effective they are we touch on all sorts of related topics: what the different levels of AI are, how safe the roads can get, the mix of hardware and software in modern vehicle safety systems and much, much more!

See show notes and more more at notunreasonable.com/podcast

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Dinos Iordanou on Cyprus, Hard Work and Culture

Mon, 03 Jun 2019 01:00:00 -0400

My guest for this episode is Dinos Iordanou, former Chairman and CEO of Arch, which he co-founded as Arch in 2001 and led from 2003 until retiring last year. In this incredible episode we cover:

Dinos' homeland of Cyprus (who is his favorite Cypriot? Who is the best Cypriot soccer player of all time? Where did a poor, young Dinos vacation and why?)
'Crappy' jobs (and why Dinos loved them all),
What quality Hank Greenberg and Warren Buffett share (Dinos worked with both!)
What lessons Dinos learned from Warren Buffet
The power of culture to transform firms
Philotimo, what it is and why it matters for a leader

An amazing show and my deep appreciation of Dinos for his time. See notunreasonable.com for more!

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Mango and Mosher on Actuarial Innovation

Sun, 05 May 2019 23:00:00 -0400

My guests for this episode are Don Mango Global Head of Actuarial Pricing and Modeling at Everest Insurance, Two-term Casualty Actuarial Society Board Member and former CAS Vice President of Research and Development and Matt Mosher, EVP and Chief Operating Officer of A.M. Best Rating Services, responsible for rating operations globally.

For these heavyweight guests we tackle a heavyweight issue: are actuaries innovating enough? How would we innovate more?

We discuss:

whether innovation is greater in pricing or reserving,
whether risk classification is the seat of all innovation,
how AM Best sees its role in innovation,
the impact of driverless cars on insurance innovation (the answer might surprise you!),
what happened in the UK?
how should the formal Standards of Practice influence the identity of actuaries and innovation in the field.

And much more!
See episode details and links at notunreasonable.com/podcast

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Mike Sapnar, CEO of Trans Re: There's always a Buyer and a Seller

Sun, 21 Apr 2019 21:00:00 -0400

My guest for this episode is Mike Sapnar, CEO of Trans Re, a 4.5 bn premium reinsurer based in New York City. For many in my business Mike needs no introduction: we cover what the differences are between insurance and reinsurance, what makes for good negotiators and what Mike learned going through an agonizing year or so while his company was in the spotlight, subject to friendly and hostile takeovers alike a few years back. I've never been anywhere near the pilot's seat during an all-or-nothing M&A roller coaster and Mike takes us through what he learned in those harrowing few months.

David Wright: 00:58:09 Tell me something you learned.

Mike Sapnar: 00:58:10 So, um, first of all, I learned there are no mergers of equals. It doesn't exist in Wall Street parlance. There's always a buyer and a seller.

David Wright: 00:58:19 Yup.

Mike Sapnar: 00:58:20 And even though we were a bigger company, we were getting a premium. We were doing a book for book swap, but we were getting a well let's come back to that. We were getting, it was a book for a book deal. We were going to have seven of the nine top positions, um, reinsurance was going to be a dominant part of the portfolio. And we felt we weren't the seller at the end of the day. Cause we were, we were the bigger company.

David Wright: 00:58:56 This is the Allied World transaction.

Mike Sapnar: 00:58:57 Yes. Yep. We were a bigger company. The issue was is we were getting a bigger premium in the book for book value based on the market price. And so Wall Street kind of said, well Transatlantic is the seller, they're getting the bigger premium. Is that a big enough premium? Is there something else out there? Hmm.

David Wright: 00:59:12 What does it matter?

Mike Sapnar: 00:59:14 Why does that matter if you're the, if you're the seller?

Listen for more!

If you enjoy the show, see more of my stuff at notunreasonable.com!

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Social Media Changes Politics with Martin Gurri

Fri, 08 Mar 2019 00:00:00 -0500

Martin Gurri is a former CIA analyst whose book, the Revolt of the Republic, has put together the best explanation I’ve heard yet for how and why social media has changed politics everywhere in the world. His theory links together the color revolutions, Brexit and *both* the Trump and Obama presidencies.

To me most political discourse is unproductive shouting, which I loathe and Martin can explain both why the discourse looks that way and why I loathe it!

The core insight came from Martin’s career analyzing media reports around the world and he noticed the decline of the primacy of 'papers of record'. This coincided with big changes in political discourse everywhere.

In this interview we compare various social media platforms, discuss what the public really wants and how we might get out of this mess. Martin has the unique distinction of recognizing the commonalities between Obama and Trump and his theory ties together movements on the left and the right.

Martin stands out as a dispassionate and insightful observer of current events and I've learned an awful lot studying his work.

youtube link: https://www.youtube.com/watch?v=gv37RMaQndU

show notes:
https://notunreasonable.com/?p=7416

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Judah Cohen on the Winter of 2019

Tue, 12 Feb 2019 00:00:00 -0500

This episode is an update from last year's check in with Judah Cohen, Director of Seasonal Forecasting at AER, a Verisk Company and a Research Affiliate at MIT. We talk about the winter of 2019 including the incredible cold snap that hit the continental US, other anomalous weather patterns (very cold arctic!) and how all these systems interact. Enjoy another ultimate weather nerd-out with us!

Are you an actuary? Someone you know? Check out the Not Unprofessional Project, for the price of a CAS webinar you get unlimited access to content dedicated to Continuing Education Credits for Actuaries, especially Professionalism credits. CE On Your Commute!

Subscribe to the Not Unreasonable Podcast in iTunes, stitcher, or by rss feed. Sign up for the mailing list at notunreasonable.com/signup. See older show notes at notunreasonable.com/podcast.

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Ted Tafaro and Chris Lack on Insuring Exceptional People

Mon, 28 Jan 2019 05:00:00 -0500

My guests for this episode are Ted Tafaro, Founder and CEO of Exceptional Risk Advisors and his partner Chris Lack. Exceptional Risk Advisors writes insurance policies covering complex human capital risks for highly successful individuals such as Entertainers, Athletes, Corporate Executives and other Professionals.

My opening question is about what Trevor Lawrence should do. Do they suggest any changes to his lifestyle? Which sports are the most dangerous and is that the same as the most expensive insurance policies? We touch on what an athlete's life is like from an insurance perspective, what is with those weird celebrity insurance coverages (legs, hands and butt!). Who buys the insurance for musicians and entertainers? What kind of celebrities make the best insureds?

Tune in for all this and more!

youtube: https://youtu.be/xOEenA3myCU

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Agnes Callard on Aspiration, Socrates and What does Philosophy Feel Like?

Fri, 11 Jan 2019 06:00:00 -0500

Agnes Callard is associate professor of philosophy at the University of Chicago and her specialties are in ethics and ancient philosophy. Agnes recently wrote a book called Aspiration which tackles an intuitively clear concept, that we aspire to learn new things and to value them.

The thing with philosophy is that it seeks to apply order to our thoughts and this isn't always easy.

Philosophers spend their time sorting through intuitions to find the logical reality behind them. It's abstract stuff and in preparing for this interview I was reminded exactly how my mind recoiled at this in my undergraduate philosophy studies. We discuss this as well!

Agnes is breaking all kinds of new philosophical ground by reconciling this very deep urge in us all with the rest of mainstream philosophy. Agnes is also one of the more charismatic interviewees I've had the pleasure of sitting down with... you just get this feeling that she's struggling with the immensity of the material as much as we are, though of course she is brilliant and finds the answers!

So buckle up, folks, and come get philosophical with me!

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[3-min clip] Entrepreneurs as Underwriters with Bart Hedges

Fri, 21 Dec 2018 00:00:00 -0500

Every manager wants the dynamism of an entrepreneurial spirit in their company. The benefits of empowering highly skilled people are enormous and there is a long list of organizations that do this well and these are some of the most successful companies on earth.

But it isn't easy because risks can be very real and very scary. Listen to this clip from my conversation with Bart Hedges (two-time Reinsurance company CEO) on the tradeoffs between entrepreneurship and risk aversion in managing highly skilled teams in a Reinsurance company.

Listen to this clip alongside my short essay "Herding Peacocks" which you can find on the blog at https://notunreasonable.com/?p=6900.

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Tyler Cowen Reads A Precept Then Interviews Me!

Sun, 16 Dec 2018 17:00:00 -0500

While my interview guests are getting settled in I occasionally ask them to read out some of the actuarial code of conduct and we discuss it. I'm assembling those clips into some content for my paid actuarial continuing education channel which all actuaries you should check out (and get those CE credits before year-end!).

When I did this with Tyler my little warmup act turned into an impromptu Conversations with Tyler where we explore what it means to be an actuary and whether he and I might start a competitor organization!

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6-min Clip: The Moral Puzzle of Sales feat. Jonathan Beach

Mon, 26 Nov 2018 00:00:00 -0500

My second interview, with Jonathan Beach, is easily (easily) the most underappreciated show I've done. JB is one of the most influential people in my professional life. We don't all get to record the semi-mythical stories that form our intellectual style and professional value system. I do!

This is one of the stories I tell to just about everyone given enough time because, like all great fables, I think it teaches powerful lessons in how to behave and how the world works. In this story an ounce of kindness brought riches and devastation. It serves as a tool for thinking about the interplay between knowledge, responsibilities and the power of simple human decency.

Enjoy the show and if you're an actuary, you should head over to notunreasonable.com and consider supporting the Not Unreasonable Podcast by purchasing a specialized stream of professionalism content tailored for actuaries!

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Blockchain! With Steve Mildenhall

Mon, 12 Nov 2018 00:00:00 -0500

Today we have the return of Steve Mildenhall where Steve and I talk blockchain! Steve suggested the idea to me a few months ago and that sent me down a bit of a rabbit hole exploring this technology.

In this episode Steve and I talk about what the blockchain is from both a technical and strategic perspective. It covers insurance but we go wider! This is possibly a transformational innovation, but how?

youtube: https://youtu.be/EAZI0qs8GHA
show notes: https://notunreasonable.com/?p=6850

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Terri Vaughan on The Financial Crisis and Why State Regulation Works

Mon, 15 Oct 2018 00:00:00 -0400

This episode features Terri Vaughan, professor of actuarial science at Drake University and CEO of the NAIC during the Great Recession. We can call this the Not Unreasonable 10-year retrospective on the financial crisis. I first came across Terri's work as an actuarial student and been fascinated ever since by her case for state regulation and citation of the insurers' performance during the financial crisis as evidence in its favor.

Youtube: https://youtu.be/x0Ov4BgHlsY

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Tyler Cowen on Stubborn Attachments, Tyrone and Multiple Perspectives

Mon, 01 Oct 2018 00:00:00 -0400

This is a special interview for me because Tyler Cowen has been an enormous intellectual and moral influence on me over the last ten years or so.

I'm not alone. Tyler blogs with Alex Tabarrok at marginalrevolution.com, which is usually ranked as the top economics blog and Tyler as one of the most influential economists of the day. Tyler's books (see my blog post) are also enormously influential and you name your favorite economic or financial public intellectual and they probably read Tyler every single day.

The interview I've wanted to do with Tyler has been the "who is Tyler" conversation. Luckily he just wrote an entire book on what he values and why. That new book, Stubborn Attachments, is the foundation for Tyler's entire value system. What an opportunity to dig in.

And yet I am so immersed in Tyler's thinking that it's hard for me to appreciate that you might not yet see why I think he's worth understanding (and he is!). So please visit my blog post for a podcast transcript and a quick run-down and reading list of some ideas and books that will help prime you for this conversation.

Are you an actuary? Someone you know? Check out the Not Unprofessional Project, for the price of a CAS webinar you get unlimited access to content dedicated to Continuing Education Credits for Actuaries, especially Professionalism credits. CE On Your Commute!

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How Specialty Insurers are Like Arbitrageurs - Deep Dive with Rich Derr

Thu, 20 Sep 2018 00:00:00 -0400

This episode is about diving deep into a comparison between stock market arbitrageurs and specialty insurance underwriters. The idea for the show came from the guest, Rich Derr, an actuary at Nationwide Insurance Company's specialty division and I love nothing more than falling down a well with someone comparing financial and insurance markets.

The original paper that inspired Rich is called The Limits of Arbitrage and doesn't really contemplate insurance. That's our job! I learned a lot in this conversation, actually, and some of the insights will stick with me a long time.

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[3-min clip] How Surviving A Terrorist Attack Changes Your Life

Mon, 10 Sep 2018 00:00:00 -0400

In this clip from my conversation with Barbara Chabbaga, Barbara talks about being in trapped in a storage closet for hours while terrorists massacred mall shoppers outside the door. She was sure she'd die but didn't and describes what it was like coming home to her infant daughter and what decisions her newfound resolve drove her to.

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Joshua Gans on Prediction Machines

Thu, 23 Aug 2018 00:00:00 -0400

How are we supposed to think about Machine Learning? How are businesses going to change? This week I interview Joshua Gans, Professor of Strategic Management at the Rotman School of Business at the University of Toronto and the Chief Economist at the University's Creative Destruction Lab. Joshua is the co-author, along with Ajay Agarwal and Avi Goldfarb, of Prediction Machines: The Simple Economics of Artificial Intelligence.

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The Not Unreasonable Book Club With Steve Mildenhall- Episode 1

Thu, 02 Aug 2018 00:00:00 -0400

Today I'm kicking off a new series tentatively called the Not Unreasonable Book club to be co-hosted with Steve Mildenhall (who is running for the board of the Casualty Actuarial Society, so vote for him!). Steve is an assistant professor at St John's University's school of risk management and former head of Analytics at Aon Re. Steve's an all-around smart dude and I'm looking forward to learning from him and hopefully disagreeing once in a while!

Books and papers discussed in today's show:

On Radical Markets: Uprooting Capitalism and Democracy for a Just Society by Richard Posner and Eric Glen Weyl

Capitalism without Capital: The Rise of the Intangible Economy by Jonathan Haskell and Stian Westlake

The Theory of Risk Bearing: Small and Great Risks by Ken Arrow

The Nature of the Firm by Ronald Coase

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How's Lloyd's Doing? With Rob Johnson

Tue, 17 Jul 2018 00:00:00 -0400

Rob Johnson returns to the Not Unreasonable Podcast for a deep dive into the financial results of the Lloyd's market. Rob almost always has a contrarian view of insurance company results. Usually when an insurer is lamenting their results they're much better than they seem. And when they're pumping up their performance, that's a warning sign! Rob has taught me that insurance companies are remarkably resilient institutions and amid all the hand-wringing of the Lloyd's market's results he remains sanguine. So join us for a test of your geek credentials this week and let's learn something about Lloyd's!

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Joe Petrelli is Disrupting Rating Agencies

Tue, 26 Jun 2018 00:00:00 -0400

My guest this week is Joe Petrelli, the founder and CEO of Demotech, a rating agency based in Columbus, Ohio. This interview was a particular delight for me, folks, because I've finally found a real example of classic Clay Christensen Disruption in Insurance. Demotech has been quietly disrupting what he calls "the legacy rating agencies" for decades.

THIS is what real disruption looks like:

Underserved, low end market? Check.
Looks like a 'toy' product that no serious player should consider? Check.
Slowly creeping upmarket against all odds? Yep.

That's disruption kids. And he did it at least two more times with Florida Homeowners and Title insurers. Astonishing. Joe should be an insurance innovation celebrity.

youtube: https://youtu.be/O0T-t1wz-DI
show notes: https://notunreasonable.com/2018/06/26/demotech-is-the-disruptor-with-joe-petrelli/

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[1 min clip] Ted Blanch on the Dawn of Cat Modeling

Thu, 14 Jun 2018 00:00:00 -0400

It was harder than it looks now in retrospect!

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Managing Hedge Funds, Insurers and Reinsurers with Todd Hart

Thu, 14 Jun 2018 00:00:00 -0400

Todd has had the following jobs: political campaigner, investment banker, hedge fund trader, hedge fund portfolio manager, private equity investor, reinsurance company CEO, insurance company CEO and stay at home dad. I've known Todd for many years and have always admired his level-headed attitude towards complicated problems and what otherwise might be very difficult situations.

You can be smart and hard working, and Todd is both those things, but to me is he is more of a model for *how* to be smart and hard working. In the interview I want you to listen for evidence in the more universal qualities that set Todd apart: curiosity, optimism and a fundamental decency especially towards people that work for him and with him. Sign up for the mailing list at notunreasonable.com/signup. See older show notes at notunreasonable.com/podcast.

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Why Building Systems Is Hard With Bill Jenkins

Wed, 30 May 2018 00:00:00 -0400

My guest this week is Bill Jenkins. Bill is a technology specialist in the insurance industry. I like to joke that the customer satisfaction rate for insurer systems is 0. But does that need to be the case? I've finally had the chance to ask these questions of an out and out expert. Bill has headed up internal technology projects at insurers, he's run the technology at brokers. He's been a consultant. A Board member. An industry standards advocate. If there is a puzzle in insurance technology, Bill has probably thought about it and here he is today to help us all better understand why we struggle with technology in insurance. Are you an actuary? Someone you know? Check out the Not Unprofessional Project at notunprofessional.com, content dedicated to Continuing Education Credits for Actuaries, especially Professionalism credits, for the price of a CAS webinar. CE On Your Commute! Subscribe to the Not Unreasonable Podcast in iTunes, stitcher, or by rss feed. Sign up for the mailing list at notunreasonable.com/signup. See older show notes at notunreasonable.com/podcast.

youtube: https://youtu.be/Yf7GngLv9to

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Barbara Chabbaga on Insurance Product Development in Kenya

Mon, 14 May 2018 00:00:00 -0400

Barbara Chabbaga is an insurance product consultant in Kenya. She trained as an actuary in Canada before returning to Nairobi and working for a carrier there. After surviving a terrorist attack she quit her job and founded a consulting company, AB Consultants, to work on microsinurance product development. Barbara wrestles with the same problems we all face and so this interview was a fantastic mix of familiar and foreign (to US ears). We cover a lot of ground including life as an immigrant, why she chose to study in Calgary, Alberta after growing up right near the equator, how to build products and what it felt like hiding in a closet during a terrorist attack.

Subscribe to the Not Unreasonable Podcast in iTunes, stitcher, or by rss feed. Sign up for the mailing list at notunreasonable.com/signup. See older show notes at notunreasonable.com/podcast.

youtube: https://youtu.be/zrAiCzyaT-0

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Insurance is Not Sold with John Shettle

Mon, 30 Apr 2018 00:00:00 -0400

Recently I've gotten to know today's guest, John Shettle, and all along I've been trying to figure out how to just hook up the cables and suck as much information out of him as I could. But how do you ask someone: hey can I just pepper you with the most challenging questions I can think of in insurance for an hour or so.. you know, for fun?

I'll tell you how.. you start a podcast and pretend "it's all for the audience".

John Shettle is awesome. He's currently an operating partner at Stonepoint Capital and grew up at a family-run MGA, running brokerage and underwriting divisions before taking that company public. The breadth and depth of John's experience is extraordinary. As another highly successful insurance executive put it to me recently, you can never have enough time with John. I'm honored to have the chance to bottle a bit of him up for us all.

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A Spirit Guide For Insurance, Rick Lindsey

Sun, 15 Apr 2018 00:00:00 -0400

I sometimes think of insurance as a morality game. The problem of assessing and pricing risks is so hard that we fall back on human concepts of fairness and relationships to guide our actions.

Think about the oldest of old school underwriters. They build relationships. They fight claims swindlers and predators to the death. They're unscrupulously honest and fair.

Perhaps the most fundamental human quality is trust and the thing that great underwriters are great at is figuring out who is worthy of that trust and nurturing it. Rick Lindsey is to me the embodiment of the humanity in insurance. His insurance isn't about technology and data transfer and machine learning. Unfortunately I lost some of the beginning of this interview where he tells a story about fighting a lawyer on a 75k homeowners claim and winning at a cost of 700k on expenses. He'd do it again every time. Rick is the CEO of Prime Insurance company and he is old testament.. he understands a few really big ideas better than the rest of us and has the force of personality to show us the way. I'm calling him our spirit guide. Here's why..

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Paul Ingrey on Marc Grandisson (1 min clip)

Tue, 03 Apr 2018 00:00:00 -0400

Marc Grandisson recently became CEO of Arch Capital Group. Ever wonder what he was like as a young man? Well find out in this re-air of a clip from my episode with Paul Ingrey on how Marc joined Arch.

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Gabe Glynn on Iowa, Manufacturing and Sending People Home From Work

Tue, 27 Mar 2018 00:00:00 -0400

Today's guest is Gabe Glynn, co-founder and CEO of MakuSafe and host of the Advanced Manufacturing Podcast. Gabe's company is a technology startup designing wearable sensors to dramatically improve workplace safety in manufacturing.

We cover a lot of ground in our conversation, including the culture of manufacturing, why unemployment is so low in Iowa and, of course, how to spot shoplifter.

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Why Cut Education with Bryan Caplan

Tue, 20 Mar 2018 00:00:00 -0400

This show's guest is Bryan Caplan, Professor of Economics at George Mason Unviersity and his latest book is *The Case Against Education: Why the Education System is a Waste of Time and Money*. In this book Bryan makes the point that if we evaluated school based on what we are saying it does, teach us useful skills, it fails. So, argues the book, education spending should be cut dramatically. To paraphrase something Tyler Cowen once said: Bryan does a much better job defending his 'crazy' ideas than you think he will.

We cover much more, including Bryan's very interesting idea of the Ideological Turing Test, that just because educaiton is signalling doesn't mean it doesn't work and the impact of educational signalling on the civil rights movement!

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At The Cutting Edge of Insurance Modeling With Jim Weiss

Thu, 08 Mar 2018 00:00:00 -0500

Today's guest is Jim Weiss, the director of analytic solutions for ISO. ISO houses perhaps the richest insurance data repository on the planet and among Jim's responsibilities is building models that don't use it! I joke.. Actually, Jim is exploring new frontiers of modeling for insurance purposes. This episode works very well in conjunction with the Cathy O'Neil episode which of course recommend you listen to right away!

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youtube: https://youtu.be/_VQ5-RYmm14

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Weapons of Math Destruction with Cathy O'Neil

Thu, 08 Feb 2018 00:00:00 -0500

This week's guest, Cathy O'Neil, wrote a book called Weapons of Math Destruction, which explores how pervasive predictive modeling is becoming and also how bad models influence, sometimes direct, big decisions. Bad in this case means models that are, to the trained eye, laughably inappropriate for their task. Take for example teacher testing, which will make hire/fire decisions on teacher performance based on an absurdly small and biased data set.

We of course also discuss the potential of algorithms and how Cathy set up a company, ORCAA, to audit algorithms to ensure they aren't, as she calls them WMDs! We also dive deep into the why of bad modeling, what it's like to be a math professor on and off airplanes and insurance risk.

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Fighting Against Weather Models With Judah Cohen

Wed, 31 Jan 2018 00:00:00 -0500

Ever wondered what the polar vortex is and why it can get so cold in the winter? Judah Cohen is among the few who has been able to predict these things has an answer.

Judah is director of seasonal forecasting at AER, a verisk business, and a visiting scientist at the civil and engineering department at MIT. Judah has observed, like many of us, that the major weather forecasting models aren't particularly good in the Winter. He builds his own forecast, modifying the outputs of those models, and has a pretty good track record.

I came across him because in the winter he maintains an exceptionally technical blog on forecasting the winter weather. He updates it weekly and keeps a running forecast of what's going to happen at various time intervals according to his own model and his modifications of the results of the more mainstream models all TV and website meteorologists use.

What really struck me in this conversation is how mysterious the atmosphere still is to the scientific community. We discuss this, Judah's proposed mechanism for the phenomenon we call the Polar Vortex, Judah's love of snow and much more.

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No Change Without Fear With Paul Ingrey

Tue, 23 Jan 2018 00:00:00 -0500

For reinsurance people, this interview is electric.

Paul Ingrey founded three of the most successful reinsurance companies of the last 40 years: Prudential Re (Everest Re), F&G Re (10% of staff became CEOs) and Arch Re (as we know it today). Thousands of people in the industry can trace their employment back to Paul's unique mix of discipline and charisma.

Being successful in insurance, like with many things, isn't complicated (write business in hard markets and not in soft markets) but it's devilishly hard to pull off. Paul is perhaps the original master of the cycle.

In the show we cover a complete modern history of insurance cycles, starting in the mid-60s, Paul's insurance cycle clock (see here), stories of the founding of each of the companies that would define his legacy and more.

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Paul Ingrey on Capitalizing Arch in Shadow of World Trade Center (1 min clip)

Mon, 22 Jan 2018 00:00:00 -0500

Paul Ingrey, founder of Pru Re (Everest Re), F&G Re (10% of staff became CEOs) and Arch Re (as we know it today) sat down with me recently. I can't wait to get this content out so I'll be experimenting with releasing clips as I edit the show. Feedback to @davecwright on twitter, linkedin or notunreasonablepodcast@gmail.com.

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What's Next For the Winter of 2018? With Judah Cohen (4 min clip)

Sun, 21 Jan 2018 00:00:00 -0500

Judah Cohen of AER is a winter weather expert and each year develops a forecast using his own methods that the meteorological mainstream ignores.. But the things is, you see, it works. Check out this 4 minute clip from our forthcoming conversation

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Paul Ingrey on the First Hard Market (3 min clip)

Fri, 19 Jan 2018 00:00:00 -0500

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Not Unprofessional with Don Mango

Mon, 15 Jan 2018 00:00:00 -0500

This episode is an experiment. Actuaries need to attest to having done 30 hours a year of continuing education and three of those need to be in what we call "professionalism" which can loosely be thought of as ethics for actuaries. Satisfying these is often boring work so I thought I'd try to make it interesting.

In this conversation with Don Mango, we discuss a series of cases (see webtrough.com for show notes) that I thought might be interesting to interpret in the context of the actuarial code of conduct. Quite unexpectedly I had more fun with this one than maybe any of the previous interviews, which is saying quite a lot!

I won't pretend this is for everyone but I suggest to give it a listen, even if only to hear our thoughts on Bitcoin, what a stock trader is to do if choosing between lying and screwing their client and many other examples. (to actuaries: I promise it's about actuaries!)

I'm looking into a dedicated podcast for professionalism CE credits. If you're interested, go to notunprofessional.com to sign up to a mailing list about that project.

Disclaimer: actuarial members, you of course need to use your own judgement on whether this podcast satisfies the CE guidelines. I'm counting it for mine, though!

youtube link: https://youtu.be/mjXrVXVesTg

music by bensound.com

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Taranto on Greenberg Teaser

Mon, 08 Jan 2018 00:00:00 -0500

How is Hank Greenberg Misunderstood?

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Turning Around Two Reinsurers with Joe Taranto

Mon, 08 Jan 2018 00:00:00 -0500

Joe Taranto is one of the most successful reinsurance executives in the last 40 years. He has turned around and taken public two reinsurers who even today are very prominent and successful companies: Transatlantic Reinsurance Company and Everest Re, the latter of which he spent 20 years leading as CEO and 10xing the firm over that period.

Joe started his career at AIG, a firm that has produced some of the most important leaders in the insurance business, Joe among them. We learn what is was like working there, Joe's turnaround experiences, his strategy and philosophy of management and leadership.

If you enjoyed the show please subscribe in your favorite app, rate it on itunes and you can also sign up for periodic, short updates on content I produce, including these shows at webtrough.com/signup.

youtube: https://youtu.be/9aNQS_FQXYE

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Robin Hanson Will Change How You Think

Wed, 03 Jan 2018 00:00:00 -0500

Long ago Robin thought he had uncovered some ways to make the world a better place. He expected disagreement. Instead he got indifference. How could that be? This led Robin to becoming an economist and, eventually, an answer: we aren't motivated the way we say we are or think we should be. There are hidden motives and Robin's new book, The Elephant in the Brain, lays them out.

Robin is one of the most original thinkers of our time. I'll borrow my favorite description from Bryan Caplan, who put it best:

When the typical economist tells me about his latest research, my standard reaction is "Eh, maybe." Then I forget about it. When Robin Hanson tells me about his latest research, my standard reaction is "No way! Impossible!" Then I think about it for years.

This episode covers a lot of ground including Robin's journey to writing this book, what culture wants, whether there is any relationship between the elephant in the brain and cognitive biases, cultural plasticity and much more!

Show notes: https://notunreasonable.com/2018/01/03/robin-hanson-will-blow-your-mind-2/
youtube link: https://youtu.be/NMbXTspKCvU

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In Love with Chaos with Michel de Lecq Marguerie

Mon, 18 Dec 2017 00:00:00 -0500

This episode features Michel de Lecq Marguerie. Michel, a most English sounding fellow with a most french sounding name was my first boss in reinsurance.

Michel is a classically trained musician and like any good performer Michel loves high pressure situations. This made him a natural entrepreneur and he credits that path to unlocking his own super power (my words) of creative deal making.

In the interview we also cover what it means to be creative in reinsurance, how Michel's interview while racing around London in a porche covertible went and what it felt like picking up the pieces (literally) of his office after the IRA bombing of Bishopsgate.

Show notes at webtrough.com.

If you'd like to receive emails when I post a new episode subscribe at webtrough.com/signup and please rate the show in iTunes! Music by www.bensound.com

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Intangibility, Economics 2.0 and What Makes A Modern Firm with Arnold Kling

Sun, 10 Dec 2017 00:00:00 -0500

Hey folks, today we are zooming out to the big picture.

We talk a lot about technological trends (software eating the world, bitcoin, AI) but *organizational* trends aren't given their due. And organizations are evolving, partly (maybe mostly) due to technology but this line of thinking also is also distinct. One example is a recent book called Capitalism without Capital, by Jonathan Haskell and Stian Westlake, which argues that what they call intangible assets are growing in importance.

Intangible assets are ideas, knowledge, aesthetic content, brands, networks and relationships. These sit collectively in the heads of employees of an organization and in some ways sit between theirs heads in that organizations are webs of collaboration. The framework the authors establish is that intangible assets have four qualities: they scale easily, their costs are sunk (you can't sell them!), they are synergistic, in that the combination of these assets supercharge their effect and they create postiive spillovers outside of the firm itself. One observation the authors make is that synergy and scalability means companies use intangible assets to get big. Real big.

Other research supports this by pointing out firm margins are increasing but startup rates have declined! This paints a complicated picture and I wanted to find someone to help me think it through.

My choice was Arnold Kling, who has been an early commenter on these trends, publishing essays in the 90s and early 00s discussing declining variable costs (link) and the intangible economy (link to book). He has an incredibly unique perspective in that he has a mainstream economics education (completing his PhD dissertation at MIT under Nobel Laureate Robert Solow) but also started, grew and sold an Internet business in the 90s (see his story here). Arnold has experienced first hand the research and reality of organizational development and growth and I learned a lot here.

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Twitter: @davecwright
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Social Science of Insurance Essays

How Ted Blanch Left His Dent in the Universe (or at least in Minnesota)

Wed, 29 Nov 2017 00:00:00 -0500

This episode features Ted Blanch. Ted to me is one of the greatest leaders the reinsurance industry has ever seen and one of the most underrated leaders of any industry in any era. Ted ran the firm EW Blanch, taking over at about 50 employees and growing it into a billion dollar company by the mid-90s. That alone puts Ted among the most successful businessmen in the world but EW Blanch was also a pioneer in catastrophe modeling and has as its legacy a reinsurance industry in Minneapolis. How many can say they reshaped the economic geography of the United States? How he did it, his philosophy of management and Ted's downright humility shine through in our conversation. If you'd like to receive emails when I post a new episode subscribe here. Please rate the show in iTunes! Music by www.bensound.com.

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Social Science of Insurance Essays

Sales, CEOship and Unknown Unknowns with Bart Hedges

Sun, 19 Nov 2017 00:00:00 -0500

[technical note: there is some garbled audio from time to time (especially around minute 55) because, well, Bart is calling in from a boat. Not the greatest connection. I've decided to leave it intact because you can still mostly make out what's going on. Apologies for this. Thanks for listening] Bart Hedges is an actuary, former teenaged entrepreneur and the son of a car salesman. He recently stepped down as the CEO of Greenlight Re, an affiliate of David Einhorn's Greenlight capital and an innovator in the reinsurance business. On top of it all, Bart's 'good guy quotient' is off the charts. I'm an admirer of Bart's and was thrilled to have the chance to dig into his perspective on the business and career so far. Please subscribe and be sure to rate the show on iTunes! Music by www.bensound.com.

youtube: https://youtu.be/hiC9Sc51WH4

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Social Science of Insurance Essays

The Explorer: Don Mango on Writing, Culture and the Future of Insurance

Sun, 12 Nov 2017 00:00:00 -0500

Don Mango is one of the most important thinkers in insurance. He has published numerous papers and helped, in my mind, the rest of us figure out what on earth to do with all the computational advances of the last 20 years.

In this episode we talk about that as well as how publishing research changed his life; what his relative strength is among published authors; the peculiarity of the intellectual community of actuaries; how capital should be modeled (you can all eat the pie!); the future of technology in insurance and more!

Show notes at notunreasonable.com
youtube channel: https://youtu.be/v6tGZ6PqfEQ

Music by www.bensound.com

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Social Science of Insurance Essays

How Jonathan Beach is An Awesome Salesman

Mon, 30 Oct 2017 00:00:00 -0400

Jonathan is founder of Beach and the best salesman I've ever met. His style was an enormous influence on me personally and on the culture of my firm as a whole. I wanted to do this interview to help explore what our culture is and what its most prominent practitioner can achieve with integrity, self-awareness, openness and honesty.

In this interivew we cover:

Jonathan's first sales experience
How Beach was founded
What he says when a client asks if he can do something
How Jonathan changed his mind about actuaries
How Jonathan builds trust and relationships

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Social Science of Insurance Essays

How Insurers Hide From Themselves With Rob Johnson

Sun, 22 Oct 2017 00:00:00 -0400

Rob has been an important mentor to me through most of my career here at Beach. I wanted to take an opportunity to record some of my favourite stories of his and the key lessons he's taught me. This interview covers:

The beginnings of Rob's career and the dawn of the P&C actuary in Australia;
The paper he wrote in 1980, which to me really gets to the essence of Rob's analytical style, which we discuss;
Rob's view on risk tolerance of insurance companies (less than they think!) and how he came to that view;
How the culture of insurers is based on hiding their true profitability from themselves and Rob's view on this (he doesn't like it);
Why Rob thought he'd never work in insurance again and what he did about it.

If you'd like to receive emails when I post a new episode subscribe at webtrough.com/signup and please rate the show in iTunes! Music by www.bensound.com

youtube: https://youtu.be/evdhd58r5PM

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Social Science of Insurance Essays