Classification Game: Keeping Actuaries Occupied for Hours on End

Imagine you are walking around, new to the planet, trying to understand nature. A rat scurries by, and you see that other furry things tend to walk around. Then you hear a sparrow chirping and you see that feathered things tend to fly. Life is beautiful and ordered, and while you are contemplating that, you get bit by a flying furry thing. You watch the bat, this demon being that has turned the world to chaos, and you no longer know how to make sense of the universe. And you are now a vampire.

Nature loves to throw twists at us. The egg laying duck billed beaver known as the Platypus is the quintessential evolutionary WTF moment. Other evidence of a design team gone rogue include flying fish, carnivorous plants, the leaf slug and the tomato.

But classification headaches transcend the field of biology. For actuaries, classification schemes are what separates civilized life from utter chaos.

“A boat has a very different risk profile from a car,” explained a senior actuary. Side note, this particular actuary is a self proclaimed record holder for fastest time to identify bicycles on a ReCaptcha.

But not everything in life is cut and dry. Take an RV, for example. Is it more like a house or more like a car? And how many consecutive nights of sleeping in a Ford Taurus in a WalMart parking lot would reclassify said vehicle into a dormitory? (Asking for a friend)

“We can always make up a new category!” A recently retired insurance chief of underwriting explained, with an unsettling amount of enthusiasm. “It’s in our DNA as actuaries. We are bits of hybrids ourselves. Part economists, part mathematician, part scientist, part artist, and part computer geeks.” 

But not everyone shares the enthusiasm for blurred lines. “The actuaries keep making big messes,” a disgruntled regulator lamented. “Do you know how hard it is to come up with rules for insurers? We try really hard to keep things organized. But then some actuary decides to smash a health product into a life product and this new mutant thing doesn’t fit great into either bucket. It’s like the kids in kindergarten who mix all the paint color and present a steaming pile of brown.”

This regulator was also a leading voice against labeling dairy alternatives as “milk”.  At a congressional panel, the regulator adamantly argued that “plants don’t have mammary glands” and observed that liquid expressed from fruits goes by a different term, hence the category should be “nut juice.” This failed to gain traction in the food industry for some reason.

Like it or not hybridization seems to be inevitable. Arnie Palmers put a citrusy twist on tea. Musical alchemists like Prince and Beyoncé fuse genres like mad scientists.

Inspired by the recent announcement of a flying car, one game maker wants to capitalize on classification controversy. 

Is it a car is it a plane? This isn’t just a question for actuaries to consider in setting insurance rates, it’s a new fun way to ruin Thanksgiving by arguing with your stepdad about it!

Nash Games, makers of classics like Prisoner’s Dilemma and Equilibrium, are prototyping a new game that’s likely to be the life of social events and the end of several relationships. By the way, does thinking of Die Hard as Christmas Movie really warrant banishment to a Ford Taurus in a Wal Mart parking lot? (Again, asking for a friend)

Classification is expected to hit shelves later this year at a grocery/retail outlet near you. Actuaries and other master debaters are eager for the pending release.