Monday, November 19, 2018

Unintended consequences - automobile insurance for nonbinary people (and binary people)

This is a prime example of how changes in one system can affect other systems.

Ever since driver's licenses were first created, there was an underlying assumption that the holder of the driver's license was either male or female. Because state driver's licenses are the de facto national ID in the United States (or will be once REAL ID is implemented everywhere), the licenses not only verify your ability to operate a motor vehicle, but are used for a whole slew of other purposes, including determinations of rates for automobile insurance. Since California requires that all drivers have insurance, this is a very big deal.

Enter California's Gender Recognition Act (some other states have similar acts).

The Gender Recognition Act simplifies the process for transgender, nonbinary and intersex Californians to obtain a gender or conforming name change on state-issued identity documents. The Name and Gender Act provides incarcerated individuals the ability to change their gender or name in a California court under existing court processes....

Under the simplified processes created by the new laws, individuals may change their gender markers to nonbinary, in addition to male or female, on state-issued identity documents by petitioning a gender and/or conforming name change through a judicial process or revising their birth records. Starting on Jan. 1, 2019, individuals may change their gender markers on their state driver’s licenses and identification cards.

Now this act has all sorts of ramifications at the state, federal, and international level, but I'm going to concentrate on just one of them - the effect on the automobile insurance industry.

In California, it is legal for automobile insurance companies to base your insurance rate on your sex. So, a male might pay a particular insurance premium based upon relevant data derived from historical records, and a female may pay a different insurance premium based upon other relevant data derived from historical records.

Starting on January 1, the appearance on the nonbinary gender will affect this:

The CDI’s public notice indicates that The Gender Recognition Act which permits California driver license applicants to select “nonbinary” to appear on their driver license instead of “male” or “female” beginning on January 1, 2019, has brought forward the problems with using gender as an optional rating factor since there is no historical experience upon which to establish an actuarially justified nonbinary rate. Given the small population size of nonbinary drivers, it is likely that there will never be sufficiently credible data upon which to base such a rate.

So, what's the proposed solution to this problem? Get rid of insurance rates by sex.

Eliminating gender as a rating factor ensures that nonbinary individuals are treated fairly under Proposition 103’s mandate to avoid unfairly discriminatory rates.

However, this is only in the public hearing stage, with a hearing scheduled for December 3. And it is quite possible that those whose insurance rates will go up because of the change will object to the proposal.

Saturday, November 17, 2018

Bezos is right; every company will fail; why is this news?

So Amazon had an all-hands meeting in Seattle over a week ago, and while my professional interests were concentrated on Amazon's answers to one particular question, there's another answer to a question that has gotten a lot of press.

At an all-hands meeting last Thursday in Seattle, an employee asked Bezos about Amazon's future. Specifically, the questioner wanted to know what lessons Bezos has learned from the recent bankruptcies of Sears and other big retailers.

"Amazon is not too big to fail," Bezos said, in a recording of the meeting that CNBC has heard. "In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years."

The key to prolonging that demise, Bezos continued, is for the company to "obsess over customers" and to avoid looking inward, worrying about itself.

"If we start to focus on ourselves, instead of focusing on our customers, that will be the beginning of the end," he said. "We have to try and delay that day for as long as possible."

And now everyone is reporting this like if it's news or something.

It's not.

Sure, it's easy to name companies that have been around for hundreds of years. But most companies haven't.

And in tech, even Bezos' 30 year timeline is somewhat generous. Go back 30 years - incidentally before Amazon, Google, or even Yahoo existed - and look at the Fortune 500. Here are a few of the tech and tech-ish names on that 1988 list.

8 AT&T
25 Eastman Kodak
38 Digital Equipment
61 TRW
62 Motorola
79 Martin Marietta
127 Grumman
208 Polaroid
272 Norton
282 Compaq Computer
318 Tandem Computers
463 Sun Microsystems
483 Atari

I should note that the historical Fortune 500 list is difficult to read because it sometimes uses the companies' current names, rather than the names they were using at the time. (For example, both ExxonMobil and Mobil appear on the list.)

And yes, I intentionally included both AT&T and Motorola on this list. The 1988 AT&T was acquired by a Baby Bell that subsequently renamed itself AT&T, and the 1988 Motorola split in two, with one half going through several subsequent owners.

But these were big companies in 1988. My current employer was around at the time (itself under a different corporate ownership), and it was busily putting systems on Digital Equipment Corporation computers. (A decade later, by the time I joined, we were using more Compaq computers, and we had just bought a company using the Tandem platform.) There were proud workers at Martin Marietta and Grumman, taking on competitors such as Lockheed and Northrop. Come to think of it, the 1988 De La Rue Printrak was taking on North American Morpho Systems, Identix, Digital Biometrics, and other firms. We're all one happy family today, as part of IDEMIA.

(I can't show it to you, but several years ago I created a chart that traced the formation of the company that eventually became MorphoTrust. My chart documented the lawsuit between Identix and Digital Biometrics, and listed an investor's opinions on the merits and demerits of three separate finger and face biometrics companies. All of them became part of MorphoTrust, which de facto merged with MorphoTrak when Oberthur bought Safran Morpho to create IDEMIA. And that, my friends, is why one of my new favorite acronyms is "MVA.")

But enough about the 1988 view of biometrics, or of photography (you only had 36 shots; use them wisely!).

My list of tech companies that are no more may be anecdotal, but the American Enterprise Institute assembled statistical evidence of the transitory nature of companies.

Comparing the Fortune 500 companies in 1955 to the Fortune 500 in 2014, there are only 61 companies that appear in both lists. In other words, only 12.2% of the Fortune 500 companies in 1955 were still on the list 59 years later in 2014, and almost 88% of the companies from 1955 have either gone bankrupt, merged, or still exist but have fallen from the top Fortune 500 companies (ranked by total revenues). Most of the companies on the list in 1955 are unrecognizable, forgotten companies today (e.g. Armstrong Rubber, Cone Mills, Hines Lumber, Pacific Vegetable Oil, and Riegel Textile).

Back in the day, no one could picture a time when Montgomery Ward, Kodak, Polaroid, or Sears would hit financial hard times. And even a few years ago, General Electric was a model corporation.

And those with long memories will realize that there were times when (then-named) Apple Computer's continued existence was in doubt.

So Bezos is right. Someone's going to come along at some point and make Amazon look like a stodgy has-been that hasn't done enough to cut costs.

It's only a matter of time.

Friday, November 16, 2018

This is a test.

IDEMIA Empoprise-BI

When cost-cutting goes awry - no coffee for the NRA

In the United States, the major goal of public companies, most private companies, and even private non-profits is to maximize short-term earnings. And the best way to maximize short-term earnings is to cut costs. The theory is that cutting costs by "capping" expenses and "right-sizing" employee counts may cause temporary pain, but won't hurt the organization in any big way and will lead to a healthier organization in the future.

Well, except when the cost-cutting blows up in your face and scalds you.

By Consumer Reports, CC BY-SA 4.0, Link

Take the National Rifle Association. Ignore the political stance of the organization for the moment, and just look at the NRA as just another non-profit that has encountered a decline in revenue.

(OK, allow me one political aside; the reason that the NRA is getting less revenue is because its supporters are in power. When NRA opponents were in power, the NRA could conduct effective fundraising to get donors to counter the Obama threat. It's harder to scare people into donations when the White House and Congress are friendly to your cause. Similarly, abortion rights groups are presumably seeing an uptick in donations now that pro-lifers are in power.)

So, when you encounter a decline in revenue, you cut costs.

And everyone's talking about the NRA's latest cost cutting move.

The National Rifle Association is doing away with free coffee and water coolers for employees at its Fairfax, Virginia, headquarters — a cost-cutting move that has NRA insiders “freaking out"....

“The whole building was freaking out,” said one former employee who remains in contact with current staffers. Three other sources familiar with the gun group’s operations confirmed the story to The Trace.

So what will happen to the NRA because of this negative publicity? One of two things.

Perhaps this will energize NRA supporters to substantially increase their donations to ensure that the NRA's positions are communicated to politicians and the public, and to ensure that NRA employees don't end up sleeping on the job.

Alternatively, this may de-energize NRA supporters. "If the organization's failing anyway," they might reason, "why should I throw in more money to an organization that might go the way of Sears?"

Now some cost-cutting can be good. If you recall, the Wounded Warrior Project was publicly criticized for lavish over-spending by its former executives. While there was a drop in funding after the exposure, the whole episode was necessary to ensure the long term success of the organization.

But even the biggest anti-gun advocate isn't going to argue that coffee and water are wasteful expenses.

Monday, November 12, 2018

Empoprise-BI 2018 tip for those getting faulty "remove probe" messages on ovens

Because it's Thanksgiving, it's time for the Empoprise-BI business blog to provide its public service, yet again.

By Photo by M. Rehemtulla -, CC BY 2.0, Link

This question was posted regarding a Whirlpool Electric Control Board:

The display screen for the oven will not work. It beeps when you touch any function. You can not set a temperature or any of the oven functions. The clock works but the rest of the screen reads enter probe temp or remove probe. We do not have the probe plugged in. ?????

Hey, that sounds like a serious control board problem, and the person who answered the question treated it as such.

Joe, In most cases this issue will be caused by a faulty control board. In some instances it is the harness to the jack causing the problem but will most likely be the control that needs replaced.

But before you replace that faulty control board, consider this similar question that I wrote about in 2016.

Dacor Oven model ECS2275 PRB - probe is flashing and beeping. I was wiping down the oven with a damp (not wet) sponge and PRB started flashing and beeping on the display. How do I turn this off?

The respondent didn't talk about replacing any control boards.

Power the unit off and take and airduster can and blow out the probe port really good and then power the oven back on it should clear.

Blow out the probe port? C'mon, that's silly. How could something like that fix a serious sounding error message?

Well, in some cases (2013), it's not moisture, but...past moisture.

The jacks will tend to corrode and create resistance between terminals after many years causing just the symptoms you are seeing. The correct way to solve the problem would be to replace the probe jack part#8186589 , or you can try and unplug the jack from the harness.

Similar advice was given in 2012:

Our oven had problems right out of the box. The temperature probe messed up the entire cooking selections. Every setting wanted the probe inserted, so we had the repairman fix the probe connection.

And I can go on and on - 2011, earlier in 2011, 2010, and by now you may be wondering how the Empoprise-BI business blog got to be the expert on remove probe messages on ovens.

Well, it wasn't easy. I ran into the same problem myself in 2009.

On Friday morning, something started beeping in the kitchen. Since there are several items in the kitchen with beep capability, it took me a while to isolate the beep. It turned out that our KitchenAid oven was telling us to either enter a temperature, or remove the temperature probe.

Unfortunately, we had not inserted a temperature probe into our oven.

Using my well-honed customer support skills, I proceeded to press every "stop" or "off" button on the oven control panel. This only caused it to beep more. Reluctantly, I realized that I would have to reboot the oven...but since the oven plug was inaccessible, I would have to reboot the house (via the fuse box).

But before I did this, I figured I'd look at the KitchenAid manual to see what help it offered for this situation. It offered none.

As I was waiting for the dishwasher to finish so that I could reboot the house, the problem cleared itself up.

Then I started reading a thread.

We had the repairman out...of course, our oven started working before he made it out. But he said the probe hole can get moisture in it and cause the oven to not work until it evaporates. Which sorta explains why several of us had it start working again. It looks like several people also had it happen Christmas, probably with lots of stuff in the oven for a long time, creating lots of moisture.

In that same thread.

I took my blow dryer and blew air toward the probe for a few minutes then tried the oven again. It turned on but the icon on the front changed to 'push probe in'. I did then re-pushed the start button to 450 and it worked!

So there you have it. Your problem may just be moisture.

See you in 2019 (if Blogger still exists next year).