Move over cholera, here’s the Black Death

The Black Death, caused by the bacterium Yersinia pestis, wiped out 30 to 50 percent of Europe’s population between 1347 and 1351

Now, South Africa has been placed on high alert for a potential plague infection.

Mortality rates are estimated anywhere between 30% and 100% without treatment. Many estimates are towards the top end of this range, 80% to 95%. Treatments are available (mostly antibiotics) and are generally effective. Mortality rate where adequate treatment is administered within 24 hours can be 11%.  (Either “just 11%” or “11%!” depending on whether you’re counting up from 0% or down from 95%.)

Spread of Black Death across Europe in 14th century
Spread of Black Death across Europe in 14th century

Plague in Madagascar

124 people have already been killed by the plague in Madagascar. But this is just a particularly bad year. Continue reading “Move over cholera, here’s the Black Death”

Collective nouns for cats

In my ASSA convention presentation on systemic risk last week, I took pains to highlight the difference between real systemic risk and mere catastrophic claim risk or even concentration risk.

In this post I will cover these and other cats, the place of reinsurance including “feelings” and why this is hyper relevant for captives.

To demonstrate how even large general insurance catastrophes typically have no systemic implications for South Africa, I referenced the “2017 fire and storm claims”.

2017 Western and Southern Cape storm and fire claims

The media reported the following on these claims:

“Santam noted that the total insured damage has been estimated at around R3 billion, with economic losses (taking uninsured property into account) at significantly higher levels.

This was by far the worst catastrophe event in South African insurance history, with Santam client claims totalling around R800 million, of which R72 million related to the Cape Town property damage.”

So that all seems very intense. But then the story continues. Continue reading “Collective nouns for cats”

reserve discount and inflation part 3 is still coming

I need a little more time (read: a weekend) to finish the third part of my series on inflation and discounting for non-life claims reserves.  Keep an eye out for it next week, along with some posts on systemic risk, equity investments and risks to pension fund sponsors and a book review.

Life in our time of cholera?

I love to read, so I’m not proud to admit right upfront that everything I know about “Love in the time of cholera” I learnt in 3 minutes from wikipedia starting about 3 minutes ago. Seems like a book I should read.

But another than playing on the well known book and movie title, this post has nothing to do with the book.

It has everything to do with cholera. And the very real possibility of a cholera or similar disease outbreak in Cape Town in the next year. Here is a little superficial analysis of the numbers.

The City of Cape Town now expects us to run out of municipal water

The City of Cape Town has gone from claiming unequivocally:

“we want to give the people of Cape Town an assurance that this well-run city will not run out of water.”

on the 17th of August 107 to 4 October 2017’s:

If consumption is not reduced to the required levels of 500-million litres of collective usage per day, we are looking at about March 2018 when supply of municipal water would not be available.

How are dam levels and consumption point away from achieving these targets

CT has been stuck persistently above 600Ml (million litres) per day for an extended period and this is down from a peak of 1,200Ml per day in January 2015. The low hanging fruit are long gone. I do not see how we will decrease consumption by another 20% (since we’re over 600Ml at the moment) and this therefore suggests we will run out of water.

Consumption has reduced significantly, but shows no signs of decreasing below 600Ml per day

Continue reading “Life in our time of cholera?”

31, 151 and what comes next

This is my first new post in over two years. There are many reasons for that, and I may get into that in a future post.  As to why I’m restarting – a conversation with an old friend last night combined with a lunch discussion with an actuarial student a couple of weeks ago has inspired me to attempt to, temporarily at least, restart my blog.

I’m going further than just restarting, I’m committing to a new blog post each day for October. Now the reasons for having stopped blogging haven’t suddenly changed, so it’s likely that some of these posts will be short. (And similarly, some of them long.) Since the decision was made last night, I also haven’t though through anything like a full plan for the month.  I invite you along to see how it goes.

I’m probably not alone in being slightly more jaded, slightly less optimistic than I was two years ago. A summary of the two years might make its way into another post, more to help me collect my thoughts than anything else.

Cape Town is experiencing an intense, multi-year drought and there is a real possibility of the city running out of water before next winter. I will definitely be blogging more about the vacuum of credible communication and forecasting on this front in a later post. For now, a single-purpose website http://www.howmanydaysofwaterdoescapetownhaveleft.co.za/  is currently proclaims (they update weekly, I think, based on updated weekly reports of dam levels) that we have 151 days of water left and will run out of useable water on 1 March 2018.

For now, the claims of cholera in Puerto Rico have not been proven, but it does feel like it’s only a matter of time. Anyone fretting over drinking water in Cape Town should probably bump diseases such as cholera up their list.

The official position of the City of Cape Town is still “we won’t run out of water”, but there are reasons to doubt this and be concerned. I’m keen to work out objectively what the level of risk is. To that end, it would have been useful to be able to dissect the http://www.howmanydaysofwaterdoescapetownhaveleft.co.za/  methodology to understand how credible their forecast is. This is the entire disclosure of their methodology:

Using our recent consumption as a model for future usage, we’re predicting that dam levels will reach 10% on the 1st of March, 2018.

I’m not losing sleep over their forecast. So for now, sleep.

Foo Fighters and Munich

Brief personal note. I’m off to the Milliman Life Consultants Forum in the US this week. Looks like an amazing programme covering ORSAs, Solvency II vs EV reporting and many of their software tools. Great to have such a relevant programme to me and for us in South Africa.

I’m writing a blog post on unemployment (up soon!) while listening to the brand new Foo Fighters album, Sonic Highways, courtesy of iTunes Radio. Looks to be a fantastic album – might just become the soundtrack of my trip.

 

Norway’s new bank notes

Pretty far from a normal topic for this blog, but at least it relates to money.

Norway's new banknotes
Norway’s new banknotes

Norway has new banknotes or at least they will be 2017. Standard on one side and abstract, competition winning pixelated art on the other. Feels appropriately Scandinavian to me.