Showing posts with label ranking. Show all posts
Showing posts with label ranking. Show all posts

Jan 7, 2010

Actuary - Best Job in the World

'Actuary' ranks as the best job for 2010, based on research into 200 different positions in this year's exclusive Jobs Rated report and published by The Wall Street Journal.

Using five key measurement criteria – stress, working environment, physical demands, income and hiring outlook – the Jobs Rated report seeks to compare and contrast careers across a multitude of industries, skill levels and salary ranges, sorting them into a definitive ranked list of jobs.

So why is Actuary rated number one?
For starters, the position ranks especially well for its low physical demands and stress levels, finishing 2nd and 3rd, respectively, out of all 200 jobs. But more importantly, it is actuary's consistently strong performance overall that helped the job rise to the top of the 2010 Jobs Rated list.

Who says being an actuary is boring?
Interested in a zero unemployment profession?

Jul 7, 2008

Simpson's paradox

Let's take a look at a simple fund management score card.

Fund 1

Fund 2

Fund 1+2

Return Assets Rate Return Assets Rate Return Assets Rate
Fund manager A
8 200 4,0% 72 800 9,0% 80 1000 8,0%
Fund manager B 48 800 6,0% 22 200 11,0% 70 1000 7,0%
Total Fund managers 56 1000 5,6% 94 1000 9,4% 150 2000 7,5%

Clearly Fund manager B performs 2% better in both Fund 1 and 2 than Fund manager A. However, across both funds, Fund manager A seems to perform better.

This effect is called Simpson's paradox.

Keep in minds:
  • Always be critical in ranking mix funds (managers) on overall performance
  • Even if the risk profiles of Fund 1 and 2 are the same, Simpson's paradox may show up
  • Besides choosing the right Fund manager, choosing the right asset mix is just as important

Another nice example of Simpson's paradox is:




Survived # Start Rate Survived # Start Rate Survived # Start Rate
Treatment A 3135 3300 95 4020 6700 60 7155 10000 72
Treatment B 7395 8700 85 650 1300 50 8045 10000 80

A cohort or a series of people receive treatment A, and another cohort receives treatment B. The survival rate of treatment A is better for woman as well as for man, but not for people!

Simpson's Paradox Actuary Links:

  1. Ratemaking: The CEO asks the actuary...
  2. Smokers and survival rates
  3. Credit Score really explains Insurance Losses?