« January 2009 | Main | March 2009 »

Attitudes to Money

AMP very kindly sent me more information about their attitudes to money survey, conducted in October, from which they released results recently.

Colmar Brunton did the work and the introduction to the piece was thoughtful and clearly understood the limitations implicit in a limited self-assessment study. But the conclusions are worthwhile. The correlation with assessing oneself as being good at handling money and with saving a portion of one's pocket money is a good one to identify. It doesn't prove that paying pocket money, and then requiring your children to save some of it, will give them a better chance of becoming good with money. But it certainly won't do any harm.

Parents that look at their own state of financial management - maybe thinking "I wish I was better at this" and then thinking "I certainly hope my kids will be" may be interested to consider this as a strategy. I suspect that if we dug deeper we would find that there is a stronger correlation where parents modeled the behaviour well for their children - were they savers themselves? I suspect it would be stronger again where parents discussed budgets and savings with their children as they grew up.

If you would like a copy of the report drop a note to the helpful people at AMP's External Relations department.


Cavalcade of Risk Downunder

We're delighted to host this premium cavalcade from New Zealand, first to see the sun.

Kiwi focus

Philip Macalister of Goodreturns tops the Kiwi connection with his weekly wrap. Phil's post gets primacy because if you want a round up of the current happenings in the risk market this wrap up will give the curious non-kiwi a flavour of the current issues in the market with links to reports on profit announcements for regional insurers (AXA, AMP and Asteron) news of our Inland Revenue's focus on insurance brokers not registered for good and services tax, and a piece on life insurance stats by yours truly.

The best

Genetic testing for heart disease risk will likely put the cat among the Liberty pigeons around it's use in trauma cover rating. Best get across it now.

Another featured post is Henry Stern's piece on the way patient engagement in their care results in better care options being selected for them. It's the empowerment of the patient that I like, as well as the strong bodycheck to the 'provider knows best' of heavily state managed systems - such as our own, here in New Zealand. This reflects the underwriter's belief that the applicant tends to know intuitively a lot more about their health than you might think...

Jaan Sidorov of the DMCB really likes a report from actuary extraordinaire Bruce Pyenson of Milliman on how to get healthcare inflation under control   While getting from here to there is politically daunting, the fact is that most of the recommendations are based on healthcare patterns that are already present in areas of the United States.  Is “reform” really necessary when all you have to do is disseminate best practices across the country?  Maybe not, especially when you also see what Sidorov has to say about the knuckleheads over at the Commonwealth Fund.  In contrast to the actuaries, these policy lightweights are out of touch.

Heroes need not apply. Something instinctively strikes you when you read a story about someone who tried to prevent and assualt - and find they've have their benefits declined. It's the kind of issue you might never think would come up in group medical insurance, but where the heart should probably overrule the head, or in this case the policy document.

Michael F. Cannon reviews John Cochrane’s new paper on how deregulated insurance markets would provide “health status insurance” to insure people against increased premiums in case they pick up a chronic condition.

More fuel to the fire on the multi-vitamin issue. The great challenge with getting an education seems to be that so many placebos necessarily cease to work.

At Beyond Breast Cancer, blogger cool rain wants to get the word out that younger women are also at risk for developing breast cancer.

If thinking abbout young women's breasts has got you hot under the collar, stop and think for a moment before you reach for relief. The risks of masturbation seem to have been an obsession throughout the ages. Henry Stern deals with conflicting reports (hairy hands, short sight, etc, are not mentioned).

The rest

Insurance is set and forget - but sometimes you need a tune up - get one with this post on car insurance. Or a similar post on the basics of shopping for homeowners insurance.

Risk, but not as we know it - Bill Pytlovany, blogging at Bits from Bill, takes software giant Adobe to task for leaving users' systems at risk of being hacked.

The idea that health insurance assistance may need to be provided to families with incomes of up to $250,000 per annum (about $400,000 New Zealand dollars, or about 10 times our average wage) may strike some kiwis as an indication of the great wealth of the United States. Wow.

It's good news again on vaccines. The Mothers-Mothers blog reports on new evidence that vaccines don't necessarily increase the risk of developing austism.

A basic reminder that insurance is meant to cover catastrophic risk (big, hard to predict events) always worth bearing in mind next time you're looking at medical cover...

I almost didn't include this post on changes to unemployment benefit provisions, but back in the UK we used to call this "National Insurance" and it's fair to say it's seen as an insurance policy by many that have to fall back on it. A quick summary.

Risk Management and Compliance bloggers have some words of wisdom regarding planning for individual facilities versus more intensive risk management schemes.

Cavalcade Management

We also got a lot of personal finance links, which I have pretty savagely culled. If you popped us a note about an investment book, how to manage your mortgage, tax reduction, paying off your credit card, or some other such post, I love them. As you can see I often talk about personal finance on this blog. But this was the Cavalcade of Risk, and we stuck to that brief.

I was actually fascinated by some of the off-subject posts. One that deserves an honourable mention is the issue of disappointing people. It's inevitable that some of the off-subject submitters will be disappointed we didn't link to them, but this thoughtful article told me that's okay - you have to disappoint some people. ;-)

If you're thinking of de-lurking and hosting a cavalcade yourself then bear in mind this fortnight's post took about 2 hours to put together. That's a modest investment. It was also a lot of fun. I got to read aorund the traps and there are a number of blogs I will definitely be going back to.

If you're thinking you have something to contribute in the matters of Trauma or Dread Disease insurance, disability insurance, life insurance, or business insurance then I reckon we could do with a cavalcade with a good weighting on those subjects sometime - so get writing!

I am signing up for another. Meanwhile, feedback on this Cav is welcome.


Ban on 100% plus lending silly

Did 100% lending cause the sub-prime crisis? If it did I am yet to hear connvincing evidence. Greater than 100% lending was always very rare - but is now being banned, to what end I don't know. Given how far house prices have fallen, and the continuing contraction in the UK, 100% lending had all but disappeared anyway. Now by  moving to ban it Brown may have closed the door on the hope that some of those borrowers could refinance. Their lenders will have less pressure to pass on interest rate savings to them now.

But even for potential clients the ban is of dubious value. You see the image such lending has is that it's a symptom of a worsening situation for a borrower, as if they go from being a prudent borrower and gradually get themselves into trouble. In fact, people who take out 100% home loans are usually people that are rapidly improving their financial lives. They have to get rid of ALL other borrowing before they qualify. The discipline applied by a single lender is considerable. People get themselves into trouble with multiple borrowings from all sorts of different sources. Adding store cards, credit cards, car finance etc.

...and while we're at it, the NZ Herald gets a big thumbs down for including a picture more than a year old with it's news story about Northern Rock today.


Cavalcade of Risk

Submissions are due for the Cavalcade of risk. Guidelines on how to submit are given here and we're hoping to include a number of Kiwi posts to celebrate the downunder hosting. Even if you don't have a blog and you'd like to post, then email your proposed post to me here and I will cheerfully host it for you (subject to some reasonable-ness guidelines, I have to try and stay out of jail). http://cavrisk.blogspot.com/

Possibly the worst economics joke I have ever read...

This defence of the fiscal stimulus (which is reasonable, if not rigorous) concludes with possibly the weakest economics joke I have ever read. Link. Now this is a tough field, bear in mind all economics jokes are weak, and not to be delivered after your audience has had more than one cocktail. After three drinks your audience is likely to beat the teller to death. But with this joke even the most tolerant of listeners may contemplate the advantages of a decade in jail, reduced for good behaviour, and the applause of their friends for ridding the world of such a joke teller.