Lessons from the Credit Crisis

Which car can travel faster around a race track, one with brakes or one without?

A car will face many obstacles, let alone many bends in the track before it reaches the finish line. The ability to brake allows the race car driver to slow down to meet these challenges and to accelerate only when there is the most gain to be had.

Similarly, companies want to be resilient in the face of risk and also to be able to exploit it should opportunities for gain arise. Especially in the financial community, an enterprise risk management system that is quick and responsive to change is central to ensuring success.

More at: Actuaries Abroad: ERM Lessons from the Credit Crisis

However, if you think everything is under control, remember Andretti's one liner:

Even in risk management: Think twice.....

Ageing and the Sustainability of Dutch Public Finances

In a 2006 (but still actual) research called, "Ageing and the Sustainability of Dutch Public Finances", it's stated that the ageing of the population jeopardises the sustainability of public finances in the Netherlands.

The doubling of the ratio between the number of retirees and the number of workers destroys the balance between future public expenditure and tax revenues. Indeed, the increase in expenditure on public pensions and health and long-term care will outweigh the increase in tax revenues.




Budgetary reforms are therefore necessary in order to avoid that future generations will have to raise taxes or economize on public expenditure.

Reforms in the field of social security of the last few years are a step in the right direction, but are insufficient. In particular, the decline of interest rates and the reduced wealth of pension funds have worsened the sustainability of public finances. The effects of reforms on the intergenerational balance are important for the question which further reforms are most attractive.

Netherlands: Rapid increase life expectancy

Last year, female life expectancy at birth was 82.3 years, as against 78.0 years for men. Life expectancy has risen dramatically since 2002.

Life expectancy at birth

Mortality down since 2002

Female life expectancy at birth was 82.3 years in 2007, i.e. 4.3 years more than for men who have a life expectancy of 78.0 years at birth. Since 1980, the gender gap has narrowed. Male and female life expectancy increased by 5.5 and 3.1 years respectively. The situation has improved considerably after 2002. Despite the ageing population mortality has annually declined since 2002. Such a long period of declining mortality is unprecedented in the Netherlands. In 2007, mortality was over 9 thousand (nearly 7 percent) down on 2002.

Declining mortality by age, 2007 relative to 2002

Situation favourable for people in their seventies

The decline in mortality was quite evenly spread across all age groups, but was particularly noticeable among people in their seventies. In 2007, mortality in the age group 70-80 declined by over 5 thousand (nearly 13 percent) relative to 2002. This decline is largely the result of the reduced risk of dying from cardiovascular diseases.

Lower risk of dying by age, 2002-2007

Lower mortality risk for 50 to 80-year-old men

In recent years, the mortality risk declined significantly for both genders. For men aged between 50 and 80, the risk of dying dropped more than for women in the same age bracket. Among the very old, the situation is more favourable for women.

Female life expectancy at birth, 2006

Netherlands not in leading position

Dutch women marginally improved their position on the European record list, but in countries like France and Spain female life expectancy is considerably higher. Belgian and German women also had a somewhat higher life expectancy in 2006. In relative terms, the position of Dutch men on the European life expectancy list is better and comparable to the position French and Spanish men. Swiss, Swedish and Norwegian men, however, enjoy a considerably higher life expectancy.

Source : CBS , by Joop Garssen and Koos van der Togt