Making the World a Better Place
Charles L. McClenahan

There has been a great deal of discussion about other areas of the business world that could benefit from a casualty actuarial involvement: loan loss reserves for banks, for example, or pricing products on a risk-adjusted basis. While these are interesting possibilities, the end result would probably be higher interest rates on loans and increased prices for risky items (like McDonald's© coffee). How does that benefit society?

But there are some areas where the addition of a casualty actuarial perspective would actually make the world a better place. Following are some examples.

Competitive Sports
Let's face it. This "winning" and "losing" stuff is too doctrinaire. The current system doesn't reflect the variability of the underlying process. The fact that the Cubs haven't won a World Series for almost 100 years represents a great personal burden for me—especially given the White Sox performance last year. But if we take a casualty actuarial perspective, the fact that the Cubs haven't won is irrelevant. They have often been within a reasonable range of the title. And we enter every season with appropriate assumptions and generally accepted methodology. Taking a casualty actuarial view, the results don't matter!

Parenthood
Life would be improved if our performance as parents were judged based upon casualty actuarial principles. Why shouldn't I get credit for the 99.7 percent of the times I didn't lose the kids at the mall? Wasn't the assumption that my five-year-old daughter had remembered to put on all of her clothes before her piano recital reasonable and appropriate? And when it comes to discipline, isn't it better just to counsel misbehaving children than to actually punish them? When you think about it, parenting is a lot like loss reserving. It's a rarity when the parents actually get credit for a child that turns out okay, and when we find out that we screwed up, it is too late to do anything about it.

Why shouldn't I get credit for the 99.7 percent of the times I didn't lose the kids at the mall?

Politics
What could be a better match than that between the political arena, where results don't matter as long as one's intentions were good (see "New Deal," "Great Society," "Head Start," "No Child Left Behind") and the actuarial discipline, where retrospective evaluation is secondary to prospective expectation? Of course, the application of actuarial principles to politics would need to be limited. There is no way, for example, that the legislative branch would ever comply with our disclosure and documentation standards. And I don't even want to think about who might be left in power if there were qualification requirements.

Music
As a music lover blessed with an excellent ear (and cursed with severely limited talent) my life would be improved if I could listen to the singing of certain friends and relatives with a casualty actuarial ear. Since they get most of the words right and the notes are actually pretty close to the proper pitch, what is now torture might become quite enjoyable. I'm sure there are other areas that could be improved, but I figure that the ones I've identified represent a reasonable range, and that's good enough for me.