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Thread: What is causality?

  1. #1
    Actuary.com - Level II Poster
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    What is causality?

    What does the causality part of property and causality mean?

  2. #2
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    According to Sowa (2000) up until the twentieth century, three assumptions described by Max Born in 1949 were dominant in the definition of causality:

    1. "Causality postulates that there are laws by which the occurrence of an entity B of a certain class depends on the occurrence of an entity A of another class, where the word entity means any physical object, phenomenon, situation, or event. A is called the cause, B the effect.
    2. "Antecedence postulates that the cause must be prior to, or at least simultaneous with, the effect.
    3. "Contiguity postulates that cause and effect must be in spatial contact or connected by a chain of intermediate things in contact." (Born, 1949, as cited in Sowa, 2000)

    ---

    What you mean is casualty. It is a branch of insurance that deals with... casualties. More specifically, casualty insurance is insurance coverage for unexpected and/or sudden events, such as accidents.

    - junk

  3. #3
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    Thanks for the response.

    I am still somewhat confused as to why casuality is grouped with property rather than being an indepent field or associated with one of the other actuarial branchs.

    Perhaps because similar models are used in both property and casuality insurance?
    Last edited by Med; May 23rd 2007 at 06:10 PM.

  4. #4
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    I am by no means an expert (but we all should have at least a general understanding of the differences as this is bound to come up during an interview). In no particular order:

    Casualty: It is a branch of insurance that deals with... casualties. More specifically, casualty insurance is insurance coverage for unexpected and/or sudden events, such as accidents.

    Health: Insurance against loss or illness. Covers trips to the doctor, medicine, hospital stay, and other medical expenses.

    Property: Insurance which covers damage to the property of others. Including things like cars.

    Life: Insurance paid to a beneficiary when the insured dies.

    Pension: Money (benefits) received after retirement from an employer.

    Reinsurance: Self-explanatory. Insurance companies need to be insured themselves!

    ---

    More information about Actuaries in the insurance industry. This was taken from some website linked in this forum but I can't remember the name.

    Actuaries in the Insurance Industry
    Actuarial science and the insurance industry owe their existence to each other, and the industry remains the top employer of actuaries in the business world. Insurance provides some of the best training and best salaries for
    actuaries. It’s a demanding business, but can be rewarding in a variety of ways.
    The life and health insurance industries are the foremost employers of actuaries. On the surface, the demands are very simple—make sure policyholders are paying enough to cover the payouts necessary every day. Naturally, it’s far more complicated than that. Changing demographics and a steady stream of medical breakthroughs require insurance actuaries to question their assumptions on an almost daily basis. “They just recently published a piece on hormone therapy, saying that women who stopped taking it had a sharply decreased breast cancer risk,” says a top-level actuary at a major health insurance group. “So we have to go in and change the
    models in so many different ways. Our breast cancer models, our menopausal models, our drug cost models, everything. That one finding had us adjusting nearly everything we do.”
    As the baby boomer generation continues to age, there will be a continued call for actuaries in the insurance industry to help develop strong policies and insurance funds. This generation, in particular, is active like no other. They’re living longer, for example, but they’re also out playing sports, exploring, traveling, etc., and their potential for other kinds of injuries, diseases and mishaps is higher. Actuaries will remain busy in these fields for
    decades.
    The property insurance industry is also hunkering down for change. The onslaught of Hurricanes Katrina and Rita were a wake-up call for most insurers, and the industry is now carefully modeling a much broader ''''' of
    potential disasters. “Katrina was the big ‘what-if’ scenario come to life,” says an actuary working on post-Katrina disaster models. “It made us all look at what we were doing. It wasn’t enough.”
    Immense change, of course, brings opportunity. Insurance actuaries are being challenged to think more broadly, to mitigate a wider variety of risk and to help maximize company profits in a time of great uncertainty. There’s perhaps more pressure in the insurance industry than there was just 20 years ago … but with it comes greater rewards. Not only are good actuaries in higher demand, but the work will help save money, property and lives.

    Quote Originally Posted by Med View Post
    I am still somewhat confused as to why casuality is grouped with property rather than being an indepent field or associated with one of the other actuarial branchs.

    Perhaps because similar models are used in both property and casuality insurance?
    That I can not help you with. But don't worry, others here can

    - junk

  5. #5
    Actuary.com - Level V Poster
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    Casualty losses are much more likely to occur in connection with property (e.g., home, car, and business accidents) than with loss of life (or the individual financial losses associated with death). Health insurance is actually between life and casualty, with coverage of individual health closer to life, and coverage of workers' comp (an employer liability) associated with casualty. Accidental death is considered part of accident & health insurance, as is group health insurance (which pays for individual health risks, even if it's an employer-sponsored plan).
    I thought this WAS a real job

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  7. #7
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    According to the Merovingian, it is the nature of the universe.

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