The real Princes of The Bean Counters are Actuaries

If an actuary says there is greater risk there is greater risk

I did not realise how many times I had been around the block until I decided to tell you about a A call for Action Report that was launched by the Association of British Insurers at the House of Commons in 2010.

Reading  the report reminded me of just how many insurance companies I had carried out work for as an IT Consultant.  There was Sun Alliance, UK Provident and Eagle Star Vida in Portugal and I can tell you this, I met lots and lots of Actuaries.

Now the standing joke in the insurance business is that actuaries are accountants who found accountancy too exciting, if that is possible, and I can vouch for that, because on one project I had to share a company house with two actuaries for a few months, during which time I wrote an Early Deaths, Claims Analysis System for them, but boy do they know how to add up and calculate risk.

Actuaries mathematically evaluate the probability of events and quantify the contingent outcomes in order to minimize the impacts of financial losses associated with uncertain undesirable events. Since many events, such as death, cannot be avoided, it is helpful to take measures to minimize their financial impact when they occur.

So when I read the following on the webpage of the Association Of British Insurers:

"The challenging economic climate is having a significant impact on the fire danger. While the numbers of fires may have been falling, the increase in large-scale fires is increasingly putting lives at risk, and puts more pressure on businesses in these already difficult trading times."

So I immediately started to dig and found a written submission from the FBU for the Knight Review, which any red blooded actuary would find most interesting and difficult to tear themselves away from, but it seems that the FBU are having the same problems Blaina are having, only with the government fiddling the figures.

• 1.7 In 2012/13 in England provisional data shows that 271 people dies in fires, of which 168 resulted from accidental fires in the home [4] . There has been no impact assessment carried out on any effect the proposed changes may have on numbers and trends in respect of fire deaths.
• 1.8 Moreover, there is no analysis of the impact of the suggested changes on the rescues carried out by fire and rescue services. For example over 5,000 people were rescued from fire in England in 2009-10, an increase on the last published figures which state that there were 3,816 rescues in 1999.

Then I started to examine the statistical graphs provided in the report titled Tackling Fire: A Call for Action and looking to see if there was any correlation between the reduction of front line resources in the Fire and Rescue Service and the increased financial losses caused by deaths and fire.  My, but this is boring.  It is just like being back with those Actuaries who never drank and never had a thick head the next morning.

When the insurers have to pay out, who do you thinks has to pay more in?

Fairly clear to see that with the reduced numbers of Firefighters and closure of stations it is no wonder that the government funded research indicates that the average response times in the UK to dwelling fires has increased from 5.5 minutes in 1996 to 6.5 minutes in 2006 and as we know, a minute is the difference between life and death or losing a single room or an entire school.

The Fire Service might save money but someone else has to pick up the bill

I was not surprised to learn, that those most at risk, were the poor and elderly in deprived areas as they are the people least likely to have smoke alarms fitted.  According to the report, official figures show that 47% of homes still do not have smoke alarms - incredible.

Interesting comment left today on the site, where the commenter made the point, that South Wales Fire & Rescue Service want to save £222,541 a year by closing Blaina Firestation down and yet their fire-crew have saved the nation £5.4 million within the last couple of weeks.

I suggest that the South Wales Fire and Rescue Service sack their current crop of bean counters and go hire some real actuaries who know how to do basic maths.