My risk manager's take on (Canadian, maybe even Canada vs US) COVID response.
Getting COVID steals a year of your remaining actuarial life, regardless of your age. That's the interesting conclusion of this chart (not mine) that plots the COVID infection mortality rates versus age cohort on the same axes as actuarial chance of death in one normal year.
Of course, there are lots of caveats in this apples-to-oranges comparison. It's simple age cohorts, US normal death rates, and -- most importantly -- assumes we still succeed in flattening the curve enough for medical care to be there for those who need it. If not, it might be 2-3 years of actuarial life rather than 1.
(It's a bit hard to find in the comment thread: the data is IFRs from the Imperial study, i.e. P(death|tests positive AND ventilators available), not P(death) overall.)
For those still reading under the fold, this type of lifespan-reduction analysis from risks taken, voluntarily or involuntarily, is explored further (8 years ago, so pre COVID) by Prof David Spiegelhalter at Cambridge University in his concept of microlives.
[Originally posted on LinkedIn and facebook].
Posted on LinkedIn
People seem to be increasingly internalizing and accepting efforts prudentially required to slow down COVID-19s exponential infection rates. And hopefully we'll converge even more from the poles of "barricade ourselves behind hoarded toilet paper" and "what me worry, I don't see a problem yet" behaviour. However, given differences in, and evolution over time of, testing and reporting around the world, we also need to get ahead of monitoring the evolution of the outbreak and its containment in different geographies. We've all seen the "buy time to flatten the curve" graphic many times by now, but I think we all hope we can minimize the area under the curve, not just flatten it.
With this in mind, I'm happy to see a paper on statistical time series modeling applied to localized contagion dynamics cross my desk, from Italy no less! Pretty technical in nature, and frankly there isn't truly enough data to draw any actionable conclusions yet, but we're going to need analysis of this type to be able to extrapolate sensibly going forward, and to judge to what extent containment approaches -- including different intensities of social distancing -- are working.
As a minor improvement (and I've reached out to the author), one could consider adding a "medium-term dependence" factor over a sliding window of length equal to the incubation time. While this factor does become embedded in the long-term dependence factor, i.e. is not neglected, separating it out might allow monitoring and comparing effectiveness of social distancing measures, over time and between geographies.
Arianna Agosto and Paolo Giudici (University of Pavia), A Poisson autoregressive model to understand COVID-19 contagion dynamics, March 9 2020. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3551626
By the way, this article in the Lancet ( https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)30567-5/fulltext ) outlines some of the tradeoffs of managing spread vs long term social/economic impact, given significant and sustained reduction of R0 is needed.
Commenting on something broader than risk. See it on LinkedIn.
Sometimes a risk consultant doesn't know whether to laugh or cry. Or both.
The word "probability", in English as well as in Romance languages, comes from the Latin verb "probare", which means "to test or inspect" (it also can mean to prove/demonstrate, or approve, but that seems to be in different contexts).
In my mother tongue, Czech, the word is "pravděpodobnost", meaning "similarity to the truth", probably inspired by the German "Wahrscheinlichkeit", the property of giving the appearance of trust, or being likely to be true. I am told that in Hindi it is, "संभावना", more about chance or possibility than verifiability or truth.
As I work with clients around the world, I'm not sure there's a clear correlation between cultural background and the natural preference to consider probability from a frequentist of subjectivist perspective, but I'm pretty sure linguistic connotations matter.
A while back, I did an interview for Will Bachman's Umbrex podcast, "How to survive and thrive as an independent professional". He's recently kindly posted a transcript, which includes the transcriber's well intentioned but hilarious mis-hearing. My book project, "Be Your Own Risk Manager", got turned into "Veer On, Risk Manager!" -- which some would say is a pretty accurate verb for risk management, especially around the 2008/2009 crisis. Cynics would say even now! Full transcript below.
The request was innocuous and not atypical. Can you help our company develop risk reporting, and put in place a "small risk function" to drive it? Sure, mature risk organizations frame their raison-d'être more broadly, but many successful risk programs have as their genesis a request for better risk reporting.
However, further detail (through an intermediary) was not encouraging. The risk function was to organizationally report to the head of public relations, so as to stay "on message" with stakeholders. Not exactly what a risk professional brought up on a diet of risk management independence, three-lines-of-defense is keen to hear. I nearly declined to initiate discussions, suspecting strongly this might be a perversion of risk management into risk whitewashing instead.
But, a couple of conversations later, we're reshaping it into something that does make sense. It's a company that has been stuck in deterministic, head-in-the-sand, don't-ask-don't-tell thinking. Stakeholders are getting restless, and when they're not getting good answers to their risk-related questions, supplying their own, less-than-perfect answer. Not clear yet if there is a professional collaboration to be had, but we've progressed to a much more mutually satisfactory conversation about how to pragmatically start having a top-management-and-stakeholders dialogue about risk, not focused on staying "on message" but instead broadening the message. For me as consultant, it's a good lesson in humility. Just because the initial framing of the issues rubbed uncomfortably on some core tenets of risk management as conventionally framed doesn't mean there isn't a meaningful opportunity for better engagement with risk and uncertainty.
Principal, Balanced Risk Strategies, Ltd..