Managing Risk and Uncertainty: The Future of Insurance


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12 January 2019



Big Picture Long Term Audio January 11th 2019



Eoin Treacy's view

A link to this week's Big Picture Long-Term video is posted in the Subscriber's Area. 



Just Markets January 2019

Thanks to a subscriber for this presentation by Jeff Gundlach for DoubleLine which may be of interest. The latter half of the presentation, focusing on the high yield market and various debt markets is particularly interesting.



Eoin Treacy's view

A link to the full report is posted in the Subscriber's Area.

The Congressional Budget Office expects the US deficit to explode on the upside over the coming years. The US Treasury has hundreds of billions in bonds to sell and the Federal Reserve is inconveniently now a net seller. The rational investor is rightfully questioning where demand is going to come from.



Managing Risk and Uncertainty: The Future of Insurance

I found this presentation by Angela Strange for private equity group Andreessen Horowitz quite fascinating and thought it might be of interest to subscribers. Here is a section from the summary:

Human progress is defined by the desire to take risk — whether that’s getting married, buying a home, having kids, getting on a plane, taking a new job, even moving to earthquake country (where this talk originally took place, in Los Angeles, as part of the a16z Summit 2018).

All of these decisions require evaluation under conditions of uncertainty, which is where insurance — really, distributed risk — comes in. So, in this talk, a16z general partner Angela Strange describes how pooling risk changes as we reinvent a legacy business like insurance through technology. What’s the impact at an individual, industry, and economy level? And how will new entrants finally disrupt the ultimate game of life


Eoin Treacy's view

When I was thinking about buying life insurance, I saw HealthIQ advertising better rates for fit people on the MyFitnessPal app where I record all of my exercise and everything I eat.

That process is what I credit with controlling my seesaw weight over the last couple of years and I highly recommend the regimen for anyone with similar difficulties with their weight. I found that by being honest with myself and recording everything I ate, I naturally began to make better decisions; plus, I like the charts.  



Ericsson Mobility Report

Thanks to a subscriber for this report which reflects on the growth of the global telecommunications sector. Here is a section on India:  

In India, GSM/EDGE-only has remained the dominant technology during 2018, accounting for around 56 percent of total mobile subscriptions at the end of this year. However, the country has experienced strong growth in the number of LTE subscriptions over the last couple of years, and at the end of 2018 LTE will account for close to 30 percent of all mobile subscriptions. As the transformation toward more advanced technologies continues in India, LTE is forecast to represent 81 percent of all mobile subscriptions at the end of 2024. 5G subscriptions are expected to become available in 2022. The Middle East and Africa comprises over 70 countries and is a diverse region.  It varies from advanced markets which have mobile broadband subscription penetration of 100 percent, and emerging markets where around 40 percent of mobile subscriptions are for mobile broadband. At the end of 2018, more than 20 percent of all mobile subscriptions will be for LTE in the Middle East and North Africa, while in Sub-Saharan Africa, LTE will account for just over 7 percent of subscriptions. The region is anticipated to evolve over the forecast period and, by 2024, 90 percent of subscriptions are expected to be for mobile broadband. Driving factors behind this shift include a young and growing population with increasing digital skills, as well as more affordable smartphones. In the Middle East and North Africa, we anticipate commercial 5G deployments with leading communications service providers by 2019, and significant volumes in 2021. In Sub-Saharan Africa, 5G subscriptions in discernible volumes are expected from 2022.


Eoin Treacy's view

A link to the full report is posted in the Subscriber's Area.

India and Africa are the only regions in the world with less than 100% mobile phone penetration. The rollout of 4G in India two years ago is a major evolution for the economy but also represents a major opportunity for international companies seeking a direct route to the nation’s consumers. 4G is the gateway to mobile banking, internet access, online shopping, education and entertainment.



Email of the day on Germany fiscal stimulus

You have recently mentioned possible German fiscal easing. I am reading "Berlin Rules" by former UK ambassador to Germany, Paul Lever. On page 190 he wrote that German politicians perceive their country's interests in several ways, one of which is "the further development and enforcement of mechanisms for maintaining fiscal discipline in all eurozone states." Fiscal discipline is part of German DNA and this is supported by the new Hanseatic League of northern EU member states' governments. I fear that your suggestion for German fiscal easing is, if I might use the term, "wishful thinking."



Eoin Treacy's view

Thank you for this email which highlights the clear desire of German citizens to generally abide by a strong fiscal regime. That is particularly easy to do when the country is running large surpluses and the savings rate is in the order of 10%. However, spending continues to increase and the surplus is shrinking as a result.










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