From the Readers

Terminological criticism to unbridled kudos

Dear Editor:
I am convinced that we have done ourselves and our industry a great disservice that should be corrected.

The term "incurred loss" is redundant, in a way. There is no such thing as an unincurred loss. Yet, we persist in mislabeling what are really re-ported losses as incurred losses, which we then develop to get ultimate incurred losses-another redundancy.

This is far more than a point of style or grammar. There are two main functional points to be considered:

1. To the non-actuarial community, the terminology we use makes the concept of Incurred But Not Re-ported (IBNR) losses very mysterious. If we changed the terminology to "Reported Loss Development", we could easily explain that we begin with reported losses, develop them incurred losses, and the difference is IBNR.
2. To our actuarial colleagues, we would know when we reviewed a document whether the term incurred losses was on a developed or underdeveloped basis.

For a number of years, I have used the correct terminology in my actuarial repasts to clients. I wonder whether we can’t begin to make our usage more correct, clear, and understandable.

Hank Youngerman, FCAS

Dear Editor:
I haven’t finished the November 1996 AR yet (but I will) but I am already impressed by the new layout. I really like the fact that an effort was made to end articles on the same page that they start (or successive pages). It really makes things much easier for the reader. And one does not miss any-thing important, as I expect most readers of the AR read it cover to cover, just like I do!

Chris J. Townsend, FCAS

Dear Editor:
Regarding Bruce Spidell’s ‘AActuarialSighting” in the latest AR, I’d like to say that I have always been attracted to women who are a "10"--wait--did you say size- 1O? But seriously, don’t you think AR is going to get hammered as being sexist for even broaching this subject?

Benjamin Dover

Dear Editor:
There are. three articles in the Au-gust- September 1996 issue of the American Mathematical Monthly that might be of interest to AR readers.

The first is by Donald Minassian, titled, "The Current State of Actuarial Science." Minassian, an FSA, JD, and CPA, mainly discusses the SOA, but he includes a fair discussion of the CAS. As important current research topics, he lists ordering of risks, determination of aggregate loss distributions, ccredibility graduation, demography, interest rate modeling, health insurance, and dynamic solvency testing.

The second article is by Joseph Doob, titled, "The Development of Rigor in Mathematical Probability (1900-1950)." The section “What is probability?" quotes Poincarb as sstating that, "One can scarcely give a satisfactory definition of probability."

The final article is co-authored by Thomas Struppeck, a p/c actuary at Zurick/Centre Re. The lengthy title is, "Does (FORMULA) Really Converge? Infinite Series and p-adic Analysis, or, you can sum some of the series some of the time, and some of the series none. of the time, but can you sum some of the series all of the time?" This is pure number theory, but Struppeck and Edward Burger give surprising answers to some previously unsolved problems.

John P. Robertson, FCAS

Dear Editor:
I want to commend Stephen W. Philbrick for his regular contribution to the Actuarial Review, the "Brainstorms" feature. His writing is superb and the topics he presents make for stimulating reading. Thanks again for the column!

Jim Gant, FCAS