The sex ratio at birth is not 1 boy to 1 girl. As of 2017, according to World Bank data, it was 1.073 male births for every 1 female birth. In my mind, I still operate on the heuristic of 1.05:1. (It was 1.062:1 in 1962, which probably dates some of my professors rather than me. The US is currently at 1.048:1.)

There are several postulated reasons, including generally higher mortality of males, but also under-registration of female births, and sex-selective abortion and infanticide of female babies. Both of those last two could be attributed to China’s one-child policy. China’s ratio is still 1.15:1 compared to Sierra Leone at 1.018. (Zimbabwe is close to bottom at 1.02 with South Africa not much greater at 1.03.)

The second reason gender at birth is not a coin toss is less well known. The gender of a child is not independent of the gender of the previous child. The impact is small and best-studied on (non-human) animals. One thought is that the “condition” of the mother has an impact on the gender of the child. Other possible factors include frequency of intercourse and paternal age.

Since many of these factors are not independent, the probability of same-gender children is slightly higher than a pure coin toss would indicate, even if it were a biased 1:073:1 coin.

This post was prompted by the interesting analysis of 12 consecutive girl births in a tiny village in Poland. The “statistics lecturer” who explained quite well why this isn’t actually a surprise glossed over some, interesting to me, and arguably important distinctions that demographers (and parents) care about perhaps a little more.

The next Really Interesting Question is what happens to sex ratios, and births and genetic characteristics and selection for children in the coming decades. I can easily imagine that my own children will be the last in “my line” to be all-natural, unedited, unmodified, naturally selected genetic offspring.

One report indicates this change may roll back a year of expected mortality improvements. So perhaps those optimistic stories about “the first person to live to 200 1,000 has already been born” will fade for a while.

The thing is, it’s no utterly crazy to think about extreme life extension for currently living people. We don’t need to solve ageing in the next 40 years for a 40-year-old to live to 200 or 1,000. In the next 40 years, we need to extend life by enough time to allow the research for the next 40-year extension and so on.

I’m feeling a little old myself with a milestone birthday coming up in a couple of days. For now, 50 years still feels like a long time, although Asimov’s The Foundation series and the Long Now crowd would likely shame me into thinking I am a super myopic actuary.

Given the long silence, there are quite a few topics I’ve been thinking about and discussing with friends and colleagues. You’ll have to check in from time to time to see those discussions translate to a blog.

On the death of blogs and privacy

Blogs have changed since 2006 when this blog started. I don’t know when “peak blog† was, but it seems to be in the past. The audience monopolisers of facebook, twitter, LinkedIn, youtube, Instagram and more have, by turns, elevated and expanded voices, then monetised, controlled and manipulated those same audiences. In some, often ultimate tragic, scenarios, audiences are pushed to extreme views as an inevitable result of revenue-maximising, attention monopolising algorithms.

Brexit and Trump are the two big stories about the role of social media and revenue-maximising, attention-sink algorithms. There are countless more. I found this sobering TED talk about the disconnect between reality and perceptions. The talk uses a small Welsh village as a powerful example to demonstrate the impact of social media and at the same time the lack of transparency that makes these claims difficult to provide and all the more terrifying.

My journey away from the brink

In the last few months I’ve been on a security and privacy journey. Ironically, I harbour suspicions that this journey itself may be the result of the same pressure to extremes that youtube in particular is famed for. But each time as I try to opt out of webs of tracking and analytics cookies and code I am reminded how much tracking and identification is going on in the background and how defenceless almost all internet users are.

Sheepishly, I realise my prior habits of eagerly providing all my contact details and information to google, facebook and LinkedIn for vague, unspecified reasons makes me some of the most naïve out there.  Facebook has been dead to me for several years. Since then, the base of research highlighting facebook’s adverse role in mental health, time-wasting, election meddling and terrorism makes that decision look even better than it feels.

Some unsoliciated privacy advice

If for some reason you are still on facebook, download your data (including contacts and birthdays if that is important) and delete your profile. Then avoid the nagging siren songs for a couple of weeks from facebook to try to entice you back onto the rocks. Your life will be better.

For now, I think I will continue to use Twitter and LinkedIn to post new blogs to reach a greater audience where users have become so used to those being the only places to monitor for anything.

I still watch clips on youtube, but I do so without logging in and with tracker blocking extensions loaded up in full force. I am aggressively migrating away from Gmail (about 90% complete) and now only check Gmail via an email client that doesn’t require me to log in to google. It’s easier than you might think. I hope you too will ditch Gmail, so that my emails to you aren’t also put into the machine for their monetary purposes.

I’ve ditched Chrome and am fortunate to have an iPhone and, generally, Apple seems less utterly compromised on this front.

Whatsapp remains a problem. Facebook owns WhatsApp and collects tonnes of metadata. Download signal and use that and help me slowly wrench the network benefits away from them.

Born again without google trackers

So that’s all background to this technical update on this blog, which is actually the primary purpose of this post. Almost since inception, I have used google analytics to track users and interest on my blog. It’s useful to understand which posts are most useful and interesting. However, I feel I owe you at least as much privacy protection as I’m trying to give myself. As of a couple of days ago, I have removed google analytics from this site and am using a self-hosted tool which keeps your data out of evil hands.

You are very welcome to block this tracker too.

Future blog topics?

I will explore thoughts on privacy (and longevity, and AI and risk and capital and hyper-selection and fairness and more as usual) in coming blogs.

Possibly helpful resources on privacy

Here are some of the resources I’ve discovered and have influenced my thinking and the tools I’m using as widely as possible.

• Firefox with appropriate extensions and add ons (ublock origin, canvas blocker)
• (or if you want to go all out, TOR browser…)
• Book to get you motivated – Ten arguments to delete your social media accounts now by Jaron Lanier
• Podcast for those with long commutes with Sam Harris and Jaron Lanier (author of 10 arguments to delete your social media now)
• Signal messaging app
• If you must keep Gmail, use something like thunderbird email client (open source, free, cross-platform. There are slicker options available too. There are many more private email options compared to Gmail, but I’m not going to recommend one as suitable across a wide range of use cases and individual preferences.

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%.)

Plague in Madagascar

124 people have already been killed by the plague in Madagascar. But this is just a particularly bad year.

Every year for the last nearly 40 years, Madagascar has a seasonable outbreak of plague. This is good news in that treatment of the disease and management of its spread is well understood.

Spread of Plague

Bubonic plague, which is more common, is spread mostly by flea bites and is not particularly contagious between humans. However, it can be transmitted between humans and when it infects the lungs to become pneumonic plague, it is far more infectious.

The good news is that it probably isn’t really a major threat even with impaired sanitation in Cape Town likely from water shortages.

What about Cholera?

Despite my concerns about cholera arising out of our water crisis, it is worth noting that the 2008-2009 outbreak in Zimbabwe claimed under 5,000 lives. As tragic as each of those deaths is, it is not the hundreds thousands or millions experienced in centuries past.

From a societal perspective, these levels of pandemics are very serious. The impact on the insured population, especially when weighted by sums assured and death claims, is still likely very low. (Although catastrophe reinsurance will not cover these days. QS and Surplus are the key lines of defence here from a reinsurance perspective.)

Aside

(If you like the idea of working tirelessly to rid the word of pandemics, check out Pandemic Board Game. If you lean more evil mastermind direction, Plague is a game where the goal is to infect the entire world.)

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.

The Santam group weathered ‘the worst catastrophe event in South African insurance history’, to report growth of 14% for the six-month period ended June 2017.  Underwriting margin declined to 4.2% still within 4% to 8% range.

So we are left with the “worst catastrophe event” and underwriting results for Santam are still within range.

Which 2017 storms was that?

My slides for the convention had to be locked down some weeks back. So I was unable to include the other 2017 storms, in Gauteng and KZN.

According to this moneyweb article on the storms and insurance damages, might be between R1bn and R1.5bn for the industry. Those numbers are for the industry as a whole, so although they are higher than the R800m of claims anticipated by Santam for the earlier storms and fires, they are still major catastrophes all the same.

It’s hard to say precisely whether these claims, frequency and severity, have been influenced by climate change. The consensus is for more extreme weather all around.  While in any individual year this might mean more claims for insurers, I don’t believe it is bad for insurers overall. Insurers can adjust premiums to take the risks into account, and purchase reinsurance to protect against the damages.

On the contrary, as individuals and businesses and governments are exposed to greater risks, arguably the need for insurance increases.

(That’s a very different point from the damage of climate change and weather patterns being terrible for uninsured people and society as a whole.)

The place of reinsurance

Clearly, reinsurers picked up a significant tab for those claims. There was the usual debate around one vs two separate events, given the storm and winds that led and fanned the fires around Knysna. Appropriate use of reinsurance is so much more critical in the P&C / general insurance / short term insurance market than it is in most life insurance contexts.

The soft side of reinsurance optimisation

Adequate reinsurance, rational reinsurance modelling and optimisation  – and careful, considered and conscious risk appetite setting is key here. What I mean by that is, trying to understand how risk managers, Exco, Risk Committees and the Board will feel and react to actual claims not protected by reinsurance, either for moderately large claims within retentions, or massive claims (or multiple horizontal aggregations) above limits. Much of the modelling can be hyper-rational and informative, but the step of understanding the implications is often missed before the first event.

Even more critical for Captives

This is often an uncomfortable step for new Board members, or for representatives on Captive Insurer Boards less familiar with the significant risks and heavy reliance on reinsurance common in those structures.

Failure of reinsurers and systemic risk?

A question asked after my convention presentation was, what about the failure of reinsurers to pay out these cat claims?

There are two possibilities here:

1. The claims are so large that the highly rated, international reinsurers cannot pay. We are fortunate in South Africa given the size of our market and our relatively low risk from truly serious catastrophes that I simply don’t see this happening. The scenario of concern might be a major catastrophe at a future date after much-weakened international reinsurers were already teetering on the brink after a serious of climate-change or financial crisis impacts on solvency. Presumably as reinsurers’ credit worthiness was declining, appropriate risk management at local direct writers would be considering alternative solutions, including capital market options for risk transfer and limited risk accepted.
2. Poorly worded or misunderstood reinsurance contracts mean the reinsurer is not obliged to pay the claims, resulting in a gap between risk accepted by the direct writer and risk protection provided by the reinsurer. This is a far more significant risk. It is an operational risk from a risk taxonomy perspective, but with obvious underwriting interactions. This is where legal and compliance are needed to support the actuarial and risk functions.

The result?

All in all, cat risks and claims seem to be on the rise. Insurers may ultimately benefit from this, but only if sound risk management and adequate reinsurance cover is in place.

• Make sure your reinsurance optimisation considers hard and soft factors;
• Monitor the capital strength of reinsurers…
• …and consider capital market alternatives; and
• Confirm that your reinsurance contracts themselves provide the cover you think they do

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.

The increased awareness may prevent an increase in consumption from October to January, but we have yet to see whether this will be contained. It has been evident in every prior year. To me the question isn’t whether we get down to 500Ml in time, or ever, or how close we get even, it’s whether we manage to simply not increase consumption above 618Ml from the last week.

This graph shows the multi-year extent of the problem.

• Several dry years in a row have resulted in declining dam levels.
• Peak to trough is between 50% and 40% (lower more recently as water saving measures have had an effect.)
• Peak is usually September / October each year. So right now basically.
• We are currently below 40% capacity.
• We are regularly told that the last 10% is extremely difficult to use, so probably somewhere between 30% and 35% useable water left.

So there we have it. We should expect to use about 40% of capacity and we have between 30% and 35% available.

This is why many people have been saying, while the CoCT has been denying, that we are more likely than not to run out of water. It seems clear that at a mininum we will face water interruptions. At the margin, the interrupted washing loads (and restarting of cycles) and storage of municipal water as emergency preparation may even contribute to increased consumption.

Will people die?

Most people worry first about drinking water. This is appropriate. But drinking water will not be the problem as that volume of water can be managed in a variety of ways.

Start thinking about your ability to flush your toilet.

Cholera can kill within 24 hours. The CoCT, to their credit, plan to keep water running in informal settlements / densely populated areas etc.  I.e. trying to maintian sanitaiton and hygiene in the areas least well prepared to deal with it. I am waiting on complaints about this, but it is absolutely the right move. Help should be focussed on those least able (economically and service infrastructure and possibly education and certainly in terms of access to healthcare services) to help themselves.

There is an oral cholera vaccine now available – of course cholera is just the most infamous of likely diseases.

This may be an extreme outcome, but it feels like it should have moved from place 100 on a city wide risk register to top ten. And that is not something I would have expected even a year ago.

We will also have to see how economic activity is interrupted and what the knock on impact of that is.

It’s going to be an interesting few months.

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.

Plenty to work through here, as with the Retail Distribution Review draft and more, but here is the link if you’re interested in working directly through the papers.