A new century approach for alcohol screen in the insurance industry

Several recent studies point to the value of using combinations of biochemical markers for the identification of alcohol abuse. The Early Detection of Alcohol Consumption (EDAC) test uses a statistical method that combines the results of several routine laboratory tests to form a metabolic fingerprint for each subject. In this study, we evaluated the use of the EDAC test as a screening tool to assess heavy drinking in insurance applicants. The EDAC was calculated by linear discriminate function analysis using the results of 14 routine tests including liver enzymes, lipids, proteins, and blood sugars. We collected and analyzed 1680 random samples at Heritage Laboratories (Olathe, Kan). Alcohol Detection Services (Brookfield, Wis) and Millennium Strategies (Madison, Wis) collaborated in the data analysis and interpretation of laboratory tests results. Ninety-three percent of applicants showed a negative EDAC test. The 7% (n = 134) who screened positive for the EDAC test were then reflexed to carbohydrate deficient transferin (CDT) and whole blood associated acetaldehyde (WBAA). Sixteen percent (22/134) showed a positive confirmatory test. Among these 16% of subjects, 41% (9/22) showed no elevations in liver enzymes or HDL-C results. Four of these subjects were among the top one third with the highest elevations for the CDT test in the entire group and one of them was positive for both the CDT and WBAA tests. These results suggest that the EDAC screen may provide an efficient alternative screening tool for the identification of heavy alcohol consumption not HBA as it identifies applicants with both normal or abnormal liver enzymes and HDL-C.     

Detecting alcohol abuse: the value of carbohydrate deficient transferrin

The author, an advocate of CDT testing for insurance applicants, senses considerable uncertainty among medical directors concerning the value of the test. This review of CDT literature and the history of CDT testing in insurance laboratories is an attempt to mitigate that confusion. Two principle problems are identified: 1) the expected sensitivity of the CDT test in insurance applicants will be 50% at most, usually considerably less. 2) adapting CDT testing to commercial laboratories has been, and still is, an unsolved problem for there remains an important disparity between the method used at Clinical Reference Laboratories and LabOne. Other important issues are also reviewed: gender differences, ethnicity, LFT's and CDT, and technical facts.     

Alkoholabhängigkeit und Public Health — Soziale und arbeitsmedizinische Aspekte

On the basis of epidemiological estimations the number of alcohol addicts in Germany is estimated at 1.6 million, the number of patients abusing alcoholic drinks at 2.7 million. The diagnosis is often difficult due to aspersion and adulteration tendencies by the affected persons. Particularly psychosocial impairments are crucial for the diagnosis besides an increased quantity of drinking and alcohol related somatic and neurological consequential damages. Different questionnaire tests and clinical-chemical parameters such as GGT and CDT can relieve the diagnosis. Impairments of social environment and industrial world are substantial. The overall consequential damages by alcoholism are estimated at 20 billion € per annum. In this regard indirect costs of alcohol associated diseases are higher than direct costs. Alcohol addiction is often diagnosed at a rather late stage. However, at the beginning of an adequate therapy prognoses are often better than expected. Most of the withdrawal therapies are still conducted at a hospital. Abstinence rates of more than 40 % seem to be achievable. Furthermore a short survey of success rates of ambulant and stationary therapies is given.     

Alcohol abuse and liver enzymes (AALE): results of an intercompany study of mortality

Evaluation of applicants for life insurance who have elevations of their liver function tests or an increased probability of alcohol abuse has always been difficult for underwriters. This paper reports the results of an intercompany study in which the pooled mortality experience of a group of insureds with evidence of alcohol abuse, an adverse driving record or elevations of the liver transaminases or gamma-glutamyl transferase is summarized.     

Prostate cancer: a review of common underwriting problems, Part 1

Part 1 of a two-part discussion of Prostate Cancer from an underwriting perspective, covers the epidemiology and screening for prostate cancer. Included is a "Primer on Screening Tests" that discusses problems with digital rectal exam (DRE) and prostate specific antigen (PSA) as screening tests. Approaches to enhancing the use of PSA for screening including age and race specific ranging, PSA density, PSA velocity, free PSA, and complexed PSA are discussed. Arguments for and against the use of PSA for prostate cancer are presented. The widespread use of PSA testing in the insurance setting is contrasted with cautious statements concerning general use of PSA in the clinical preventive care setting. In a future issue, Part 2 will cover staging and follow-up of treated prostate cancer.     

PROBABILISTIC APPROACHES FOR CREDIT SCREENING AND BANKRUPTCY PREDICTION

Three probabilistic neural network approaches are used for credit screening and bankruptcy prediction: a logistic regression neural network (LRNN), a probabilistic neural network (PNN) and a semi‐supervised expectation maximization‐based neural network. Using real‐world bankruptcy prediction and credit screening datasets, we compare the three probabilistic approaches using various performance criteria of sensitivity, specificity, accuracy, decile lift and area under receiver operating characteristics (ROC) curves. The results of our experiments indicate that the PNN outperforms the other two techniques for decile lift and specificity performance metric. Using the area under ROC curve, we find that for bankruptcy prediction data the PNN outperforms the other two approaches when false positive rates (FPRs) are less than 40 %. LRNN outperforms the other two techniques for FPRs higher than 40 % for bankruptcy data. We observe that the LRNN results are very sensitive to the ratio of examples belonging to two classes in training data and there is a tendency to overfit training data. Copyright © 2012 John Wiley & Sons, Ltd.     

Men, women & alcohol: a distinctly unequal & dangerous relationship

This article illustrates how women who abuse alcohol are at greater risk physically, emotionally and socially than their male counterparts. As a result, I recommend that clinical assessment and underwriting of women, who abuse or have the potential to abuse alcohol, change to reflect the increased risks which these women face.     

Searching for evidence of long-run PPP from a post-Bretton Woods panel: separating the wheat from the chaff

This paper reexamines the issue of long-run PPP using multiple panel tests in the framework of confirmatory analysis. Application of six panel tests under competing null hypotheses to the real exchange rates of 21 industrial countries yields seemingly contradictory evidence on the parity during the post-Bretton Woods period. Regardless of numeraire currency, four I(1) panel tests unanimously reject the null hypothesis in favor of long-run PPP, whereas two I(0) panel tests lend little support to the parity at conventional significance levels. Confirmatory analysis suggests that this puzzling result can be explained either by nonlinear dynamics of the real exchange rates or by a mixture of I(0) and I(1) series in the panel. Monte Carlo experiments indicate that potential mix of I(0) and I(1) series is more relevant to the empirical finding. The use of a sequential classification method sorts out six real exchange rates which exhibit most persistent deviations from long-run equilibrium. Systematic behavior of these series can be characterized better by country specific factors than by observable macroeconomic variables.     

Earnings Management and the Long-Run Market Performance of Initial Public Offerings

Issuers of initial public offerings (IPOs) can report earnings in excess of cash flows by taking positive accruals. This paper provides evidence that issuers with unusually high accruals in the IPO year experience poor stock return performance in the three years thereafter. IPO issuers in the most "aggressive" quartile of earnings managers have a three-year aftermarket stock return of approximately 20 percent less than IPO issuers in the most "conservative" quartile. They also issue about 20 percent fewer seasoned equity offerings. These differences are statistically and economically significant in a variety of specifications.     

The Great Moderation in China: A Disaggregated Analysis

This paper examines whether the major components of China's real gross domestic product (GDP) have exhibited smoother, less volatile growth since the late 1990s, and, if so, what has caused this "great moderation" in their growth. Employing unknown-structural-breakpoint tests and constructing a counterfactual analysis based on vector autoregression models, the authors show that the growth rates of all the major components of China's real GDP have followed a relatively steady course since the late 1990s, with the most marked decrease in growth volatility (i.e., volatility of growth rate of the components of real GDP) occurring in the consumption sector. Empirical results reveal that systematic policy improvements account for less than 30 percent of the drop in the volatility of growth in aggregate consumption, while policy improvements do not explain investment and rates of net export growth.     

A Statistical Basis for Claims Experience Monitoring

Abstract

By claims experience monitoring is meant the systematic comparison of the forecasts from a claims model with claims experience as it emerges subsequently. In the event that the stochastic properties of the forecasts are known, the comparison can be represented as a collection of probabilistic statements. This is stochastic monitoring. This paper defines this process rigorously in terms of statistical hypothesis testing. If the model is a regression model (which is the case for most stochastic claims models), then the natural form of hypothesis test is a number of likelihood ratio tests, one for each parameter in the valuation model. Such testing is shown to be very easily implemented by means of generalized linear modeling software. This tests the formal structure of the claims model and is referred to as microtesting. There may be other quantities (e.g., amount of claim payments in a defined interval) that require testing for practical reasons. This sort of testing is referred to as macrotesting, and its formulation is also discussed.     

Markedly elevated gamma-glutamyltransferase

Gamma-glutamyltransferase (GGT) is a highly sensitive but poorly specific liver enzyme commonly used to detect hepatobiliary disease and possible alcohol abuse. Isolated elevations of this enzyme may be due to biochemical anomalies rather than the presence of pathology.     

Cryptocurrency,confirmatory bias and news readability – evidence from the largest Chinese cryptocurrency exchange

We investigate whether Chinese cryptocurrency investors show confirmatory bias when processing authority‐related news. Authority‐related news is defined as news that is related to government authority (including central bank) policies or talk. By using data from the largest cryptocurrency exchange in China, we find that investors’ response to authority‐related news is negative and significant in general. Moreover, we find that the abnormal trading volume and standard deviation of abnormal trading volume are significantly higher for authority‐related news with higher readability, suggesting investors respond to the more readable authority‐related news with more trading behaviour.     

Significance Testing: We Can Do Better

This paper advocates abandoning null hypothesis statistical tests (NHST) in favour of reporting confidence intervals. The case against NHST, which has been made repeatedly in multiple disciplines and is growing in awareness and acceptance, is introduced and discussed. Accounting as an empirical research discipline appears to be the last of the research communities to face up to the inherent problems of significance test use and abuse. The paper encourages adoption of a meta‐analysis approach which allows for the inclusion of replication studies in the assessment of evidence. This approach requires abandoning the typical NHST process and its reliance on p‐values. However, given that NHST has deep roots and wide ‘social acceptance’ in the empirical testing community, modifications to NHST are suggested so as to partly counter the weakness of this statistical testing method.     

Chronic time abuse

Anyone who has ever managed people who abuse time--whether they are chronic procrastinators or individuals who work obsessively to meet deadlines weeks in advance--knows how disruptive they can be to a business's morale and operating efficiency. But lessons in time management will have no impact on these employees. That's because real time abuse results from psychological conflict that neither a workshop nor a manager's cajoling can cure. Indeed, the time abuser's quarrel isn't even with time but rather with a brittle self-esteem and an unconscious fear of being evaluated and found wanting. This article describes four types of time abusers typically encountered in the workplace: Perfectionists are almost physically afraid of receiving feedback. Their work has to be "perfect," so they can increase their likelihood of earning a positive evaluation or at least avoid getting a negative one. Preemptives try to be in control by handing in work far earlier than they need to, making themselves unpopular and unavailable in the process. People pleasers commit to far too much work because they find it impossible to say no. Procrastinators make constant (and often reasonable-sounding) excuses to mask a fear of being found inadequate in their jobs. Managing these four types of people can be challenging, since time abusers respond differently from most other employees to criticism and approval. Praising a procrastinator when he is on time, for instance, will only exacerbate the problem, because he will fear that your expectations are even higher than before. In fact, some time abusers, like the perfectionist, may need professional treatment. This article will give you insight into why they are the way they are--and what can be done to help them manage their problems.     

Economic conditions,lending competition,and evaluation effect of credit line announcements on borrowers

This paper examines the determinants of the signaling effect of acquiring lines of credit (LCs) on borrower stock returns by testing the economic conditions and lending competition hypotheses. The economic conditions hypothesis is tested by examining the loan cyclicality and handpicking effects. The former predicts a negative relationship between economic conditions and borrower returns because of banks' loose (strict) screening practices in a booming (recessionary) economy, whereas the latter expects a positive relation around the time of the LC announcements. The lending competition hypothesis proposes that the more competitive the lending market is, the looser the banks' screening practices will be. Thus, a negative competition-borrower relation will result. Using LC data from 2001 to 2010 concerning 501 stock-listed firms in Taiwan, we find that evidence supports the lending competition hypothesis and the handpicking effect of the economic conditions hypothesis.     

A Rose.com by Any Other Name

We document a striking positive stock price reaction to the announcement of corporate name changes to Internet-related dotcom names. This "dotcom" effect produces cumulative abnormal returns on the order of 74 percent for the 10 days surrounding the announcement day. The effect does not appear to be transitory; there is no evidence of a postannouncement negative drift. The announcement day effect is also similar across all firms, regardless of the firm's level of involvement with the Internet. A mere association with the Internet seems enough to provide a firm with a large and permanent value increase.     

A Comparison of the Power of Parametric and Nonparametric Tests of Location Shift for Event Studies

This paper distinguishes between testing approach (parametric t, sign, cross-sectional rank, and longitudinal rank) and test type (conventional, standardized, and weighted least squares). Similar tests (i.e., tests of the same type) are compared for each testing approach using constant and unequal shift models. Thus the results given here are free of confounding effects present in prior comparisons of dissimilar tests. While all the tests compared are sensitive to the underlying location shift model, if the shift is independent of the security standard deviation, then the weighted least squares longitudinal rank test is most. powerful.     

上市公司舞弊性财务报告及其防范与监管——基于中国证券监督委员会处罚公告的分析

舞弊性财务报告是全世界经济社会和会计职业界关注的重大问题。我国目前也面临其挑战。本文以中国证券监督委员会2002—2006年处罚公告中涉及的上市公司舞弊性财务报告为依据,对我国上市公司舞弊性财务报告的主要类型、手段等进行了统计分析。分析发现,舞弊公司表外舞弊严重,所占比重大;同时存在多种舞弊类型,典型的是虚假利润表和虚假披露;虚构销售业务、虚增资产、隐瞒对外担保分别成为虚假利润表、虚假资产负债表和虚假披露的最主要舞弊手段;舞弊公司同时采用多种舞弊方法,且舞弊行为持续年限在两年以上,最长的达9年。本文最后提出了相应的防范与监管建议。