Friday, December 10, 2010

Home Insurance Is A Must And Not A Maybe-to INSURANCE TO PROBABILITY

Today I got home after having a long day at the office, thinking of a really fascinating debate we had at the office. The general talk for whatever reason led to a serious debate about insurance coverage. Half of the office was pro-insurance and the other half was of the solid opinion that insurance is only for people who live recklessly.
I (being an extremely cautious, cautious, everything that can go wrong will go wrong kinda woman) am of course on the pro-insurance squad and have made it my goal to show exactly how many dangers are lurking around each corner of your “safe and secure” family residence! I am going to therefore show that home insurance is a “must” and not a “maybe”!
The most obvious insurance is in all probability cover against robbery. Even though we reside in a beautiful country, the reality is regrettably that we also have one of the highest criminal offence rates known to man and that a burglary can happen any moment – early morning, midday or night time! We tend to be almost starting to choose the outlook of “I don’t care that they took the contents of my entire house, I am blessed to be alive!” Positivity is naturally important, however if your home contents are not covered by insurance as part of your home insurance coverage, you will not feel that positive anymore!
A while ago we woke up one night with the noise of running water in the background. Once we were gradually conscious enough to realize that we are not camping out next to a beautiful waterfall, we came to the realization that our geyser has indeed burst and the dripping sound was the sound of our whole home receiving a free rinse! Thankfully, our home insurance policy provided for this less-than-pleasant incident and our brand new geyser was installed the very next day.
My neighbor had a related event at his home. The only big difference was that rather than a geyser, it was an aquarium with 2 tons of water along with a variety of quite expensive tropical fish that ended up gasping for oxygen on his living room floor.and on the couch. and on the very expensive coffee table. and.
It is also possible to take care of yourself in the event of more specific situations. This ought to be talked about with your insurance vendor – under no circumstances assume that your home insurance scheme automatically covers you for everything linked to your house!
What happens if the hyperactive little boy down the street decides to practice his target shooting skills on your very expensive mosaic sliding door. will you be protected? And when your automated garage doors’ motor gets stuck while you’re at work and burns out the motor? Those things can be very expensive to replace, does your insurance policy cover that? Then there are the so-called acts of nature which include anything from floods and fire to lightning strikes. It’s amazing how a single lightning strike might take out that expensive home theatre system and state of the art pc that you are even now struggling to pay back. will that be taken care of and to which extent?
I trust this demonstrates to my na?ve colleagues that home insurance really should be paid with a smile – you will never know when you may need it!
Posted by INSURANCE TO PROBABILITY at 8:26 AM
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Probability analysis of the insurance-To INSURANCE TO PROBABILITY

WikiLeaks recently published a mysterious 1.4GB file entitled “insurance.aes256″ on their Afghan War Logs page, with no explanation. While much speculation has been going on as to the origins and purpose of the file, I have not been able to find any evidence for any of these theories. Many sources are saying that it is an encrypted file. Some are saying that the file could be garbage or some kind of hoax. Others are saying that it is ‘insurance’ against WikiLeaks being taken down by the United States government.
You can download the insurance.aes256 file yourself using a BitTorrent client via this magnet link. If you don’t have a BitTorrent client, or can’t/don’t want to install one, you can use this BitLet link (requires Java.)
Because of the file’s name, many media sources such as Wired that are picking up this story are saying that the file is encrypted with the AES256 algorithm. This may not be true, as Wikileaks has not said anything about the file itself. Even if it really is an encrypted file, there would be no way to tell if it really is AES256 or some other algorithm.
Most good encryption algorithms produce output that is statistically random, meaning that the output of the encryption algorithm is indistinguishable from true random number sources (such as white noise, quantum effects, or nuclear radiation). This also means that output from one encryption algorithm is indistinguishable from another algorithm.
What this means for WikiLeaks is that the file could be just random numbers designed to fool everyone into thinking that it is something big, or it could be encrypted with a different algorithm than the file says (plausible deniability.)
The AES algorithm is used by some United States military intelligence systems. It is believed by some that AES has a secret backdoor put in place by the NSA. See this, this, this, and especially this, for starters! Several attacks have been discovered in the past on AES, such as the related-key and XSL attacks, that lower the number of operations it would require to brute-force an encrypted piece of information. If the NSA really does have a backdoor, and the file is what everyone is saying it is, someone in the government with sufficient security clearance may already know what is in the file without even having the encryption key. But enough with speculation, let’s move on to the analysis…
Using a small program written by John Walker, I ran a simple probability analysis to see if there were any statistical anomalies in the file. I wanted to see whether or not the file was statistically random. This might give us clues about the file.
The chart below shows the probability of each 8-bit byte, and some general statistics at the end.

Click here to open the Probability Analysis chart»
According to the results, the file is almost completely random. There is a very tiny bias towards 0 bits showing up more than 1 bits, but this is insignificant. Again, it could just be 1.4GB of random garbage designed as disinformation intended to throw us off, or it could be some big secrets that WikiLeaks is blackmailing the government with.
I’m working on getting some N-gram charts and maybe some more autocorrelation data on this file eventually. If anyone has any information, feel free to leave a comment in the section below.
Posted by INSURANCE TO PROBABILITY at 8:23 AM
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Seeing Opportunity Where Others See None-BY INSURANCE TO PROBABILITY

The two most common complaints I get from CEO's are: 1) I'm in a commodity business, and 2) There aren't anyopportunities to grow in my market.
I'll argue that what the person really means when they say this is, 1) I can't figure out how to differentiate my business enough to earn anything above commodity profitmargins (e.g., razor thin margins), 2) I don't see any opportunities in my market to grow.
One of the double-edge sword liabilities in this economy is too much experience in one industry.
When you're in an industry that's being doing the same thing for 30 years and you've personally have not spent much time outside of your industry, it is very hard to notice new opportunities.
One of the values I often provide in my consulting work is to be not only the outsider, but the outsider who has worked across dozens of industries and routinely follows innovative companies across close to 100 industries.
My best ideas are really nothing more than taking an idea that is common in one industry and moving it to another where it's considered radically innovative.
Here's an example.
One of the industries I follow is the insurance. During my McKinsey days I worked in both auto insurance (on pricing &underwriting) and in re-insurance (the insurance company for insurance companies).
One of the challenges is the insurance business is mature, competitive, and some would argue a commodity business wherepeople just want the lowest price. (Does this sound familiar?)
I came across a very interesting company offering an entirely new kind of insurance…. for an very unusual kind of risk.
Now before I let you in on the big secret, lets think about this situation from an insurance company's point of view.
The business of insurance is about taking a low probability, high loss event and smoothing out the cash flow. So the chances of your home burning down due to a fire is very low, but if it does happen for most people they lose their single largest asset.
The cash flow pattern on a situation like this is very volatile. No loss today, massive wipeout tomorrow.
So homeowners insurance was developed to smooth out the cash flow curve… pay a little every month, eliminate the riskof a financial wipeout.
Now from an insurance company's point of view, every major risk has been covered already.
You have medical insurance, life insurance, long term disability insurance, unemployment insurance, long term care insurance, auto insurance, liability insurance, etc…
So if you're in the "product development" group of an insurance company, you're basically racking your brain trying to figure out what kind of new risk is occurring in society that doesn't already have insurance policies available for it.
So, pop quiz:
Does any opportunity come to mind?
Think for a moment…. a situation where when the worst case scenario happens there is a huge financial cost for which currently there is no insurance available to cover that risk.
One last try…
Any ideas?
Give up?
No problem, here's the latest innovation out of the insurance industry:
It's DIVORCE Insurance.
At the point of being literal, a divorce is the dissolution of a marriage typically involving some party to the marriage losing 50% of their net worth.
Does this qualify as a major financial cost by most people's definition? I'd say so.
Does competition exist for divorce insurance?  Nope.
There's only one company that offers it currently and theyhave the entire market to themselves… yes they have dibson the ENTIRE U.S Divorce market.
Posted by INSURANCE TO PROBABILITY at 8:19 AM
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Long Term Disability Insurance Benefits - FOR INSURANCE TO PROBABILITY

According to actuarial tables, a 35 year old has a 50% probability of being disabled for at least 90 days and the average duration of disability is an incredible 3.5 years. The probability decreases slightly as you get older, but the average duration increases. The probability of a 50 year old being disabled for at least 90 days is 33%, but the average duration is almost 5 years. 
Based on the probability of having a claim, I think you’ll agree that disability insurance is a good idea, but if you believe your employee Long Term Disability (LTD) plan offers plenty of protection, please read on. 
Here are a few things you should know about employee LTD plans
The overall benefit maximum may be less than you need
If your annual income is $250,000, you should be entitled to approximately $9,000 of monthly disability benefits tax-free. A $400,000 income would qualify you for a monthly tax-free benefit of approximately $12,000. Unfortunately, many employer LTD benefit plans don’t offer maximums that come close to covering these higher incomes. 
“Own Occupation” definitions in LTD contracts are NOT the same as individually owned policies
The core of any disability contract is what defines your eligibility for a benefit. Most LTD contracts will state that you are only considered disabled if “you are unable to perform the essential duties of your Own Occupation” and not working elsewhere. This typically switches to “Any Occupation for which you are reasonably qualified for by training or experience” after 2 or 5 years on claim. 
Unlike LTD, individually owned Disability Insurance (DI) policies with an Own Occupation rider will not change definitions for the duration of the claim (to age 65). In addition, the benefit can be very specific to your type of practice. 
A litigator that suffers from severe anxiety attacks while appearing in a court room is prevented from working in his Own Occupation. Disability payments would still be made even if this lawyer is able to work in a different area of law or in a completely different occupation as long as he remains disabled for his Own Occupation as a litigator. 
Unfortunately, most LTD contracts would not consider this lawyer disabled under their Own Occupation definition unless he was unable to perform his job as a lawyer and not working elsewhere. 
Your LTD may not provide benefits if you can work part-time or full-time, but at a reduced income.
If you are able to return to work on a part-time or even full-time basis, but your disability prevents you from earning a significantly portion of pre-disability income, you may have a Partial or Residual claim. While these claims are covered by most DI policies for professionals, they are not typically covered by standard LTD contracts.
A Partial Disability benefit provides coverage to someone that suffers a total disability, but is then able to work in a reduced capacity. Typically, benefits are payable if the individual has a loss of earning capacity exceeding 15- 20% due to their disability. 
A residual disability benefit provides a monthly benefit in proportion to lost income. This recognizes the fact that returning to work may be gradual and you may require an income supplement while you get back on your feet. 
Other differences
I will attempt to address other differences between LTD and DI in a future blog. In the meantime, here’s a list of items I hope to cover:
  • The All Source maximum: the maximum your LTD benefit will allow you to collect while on claim when all other sources of income are considered
  • Benefit offsets: other sources of income that directly or indirectly reduce your LTD benefit
  • Lack of LTD contractual Guarantees
  • Loss of LTD benefit if you leave your employer
  • When LTD benefits are taxable
  • LTD and a lack of protection against inflation
Please note that my advice is not intended to replace that of a qualified insurance expert who has personally reviewed your specific benefits and insurance needs. If you want to learn more before speaking to an insurance agent, the Canadian Bar Insurance Association offers excellent insurance education articles and planning tools for lawyers at www.barinsurance.com.
Posted by INSURANCE TO PROBABILITY at 8:16 AM
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With more Quotes Available you can Make a Better Decision - TO INSURANCE TO PROBABILITY

You can find the free car insurance quotes at the present by visiting at least three insurance quotes websites. Asking for free insurance quotes from a least of three websites raises the probability that you would make more savings. This is because the persons not covered by one website can be covered by some other site.
This is because your probability of finding free quotes has to do with the number of insurance quotes you obtain. If you get quotes from more companies, your chances will be higher. This provides you a broad basis for doing more careful comparisons thus increasing your chance of finding better quotes.
Doing this via internet helps you save more when compared to using an insurance broker or agent. Insurance companies get some savings if you obtain car insurance quotes and purchase online. And as entice from companies to carry out business with them online, they offer you lower quotes.
In just a short time you can get a huge number of insurance quotes. This surely indicates that you will more probably get the most excellent free car insurance quotes for your profile. To make it still better, you can do finish the whole procedure from the comfort of your bedroom.
Posted by INSURANCE TO PROBABILITY at 8:13 AM
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