By Eric P. Harding
Autumn is my favorite season. The changing foliage, the crisp air, the fall festivals—it’s all great. But the main reason I love autumn is Thanksgiving.
I’ve mentioned in this space that I enjoy cooking, and I’d be lying if I said the bountiful spread isn’t a big part of what makes Thanksgiving so appealing. (And the feast continues af-ter the day itself—do yourself a favor and mix leftover mashed potatoes and stuffing, add an egg and a bit of flour, and waffle it. Spectacular.) For me, though, having a chance for my far-flung family to get together is what puts Thanksgiving at the top of the holiday list.
In what’s come to be an annual tradition, my parents and my sister and her family are driving down from Ohio. Such a crowded house makes for logistical challenges—where do we put everyone for the big meal? But it always works out in the end. After all, the holiday is really about being together to celebrate family, traditions, and abundance; who cares if the gravy has a few lumps.
Around the table this year, we’ll have representatives from the Baby Boomer generation (my folks), Gen X (me and my brother-in-law), the Millennials (my wife and sister), and whatever sobriquet my kids’ generation will get saddled with. In this issue’s cover story, “Generational Shift” (page 22), author Jeff Reeves explores how important social insurance programs like Social Security and Medicare will be affected as various generations get older and begin to rely on these programs. Increases in longevity and health care spending, he argues, will bring heretofore unseen pressures—and likely transform how we think of retirement and health systems in the process.
Having a big family is certainly a joy, but it can bring financial challenges—with the birth of a child, or when caring for an ailing parent, for example. Taking time off work during these situations is often desirable, but the hit to your wallet can make such a decision a tough one. In our second feature this issue, “Uncharted Seas” (page 28), author Paul Correia looks at New York’s paid family leave (PFL) program, widely considered the most comprehensive among the few states that currently offer PFL. But while past experience in other states can offer directional suggestions about utilization and costs, there are many unknowns; thoughtful consideration of the risks and challenges for insurance companies is in order.
With five kids (ages 2 to 11) running around the house, Thanksgiving weekend can be … a bit volatile. We try to harness that volatility with some low-stakes football, with varying degrees of success. “Interest Rate Volatility: Be Proactive” (page 34) offers risk practitioners some advice on managing volatility. With so many market participants expecting a gradual increase in rates from historic lows, it’s tempting to follow the crowd when model-ing ranges of possible financial results—author Max J. Rudolph suggests that may be a mistake. External pressures and a complex global economy could cause rates to stay low or even fall further, he argues, and risk managers who fail to account for these possibilities are putting their companies at a potential competitive disadvantage.
As much as we might plan for the big weekend, there’s much we don’t know. Will the cranberry sauce set up? Will the Buck-eyes beat Michigan for a spot in the college football playoffs? Will there be enough wine? That theme of uncertainty plays out in our final feature, “The Explosion in Accelerated Underwriting” (page 40). Life insur-ers are increasingly issuing policies without paramedical tests, relying on applicants’ honesty on questionnaires to speed along the approval process. But with the possibility for antiselection regarding tobacco use, health problems, and other risk factors, author Hank George argues, insurers are rushing into this uncertain realm without adequately assessing the risks to the bottom line.
I hope you enjoy the issue, and I hope your Thanksgiving celebration is joyous and stress-free. See you in 2017.