Monday, February 26, 2018

Insurance 101: Butler Undergrads Write Coverage for Dogs and Pianos

Butler University’s student-run insurance company covers many things, including rare books in the library; the university’s Steinway pianos; and Trip, Butler’s mascot bulldog.CreditStacy Able for The New York Times
INDIANAPOLIS — Can you trust college students with pepper spray? If they sell blankets to other students to make money, might they be contributing to a bedbug infestation in the dorms? And how many drunken teenagers are dancing on the campus pianos instead of playing Shostakovich?
These questions, at their core, are about risk. And if you want to protect yourself from risk that has financial ramifications, you probably need insurance. Which is how it came to pass that undergraduates at Butler University found themselves in the underwriting business.
Here in the university’s Davey Risk Management and Insurance Program, 13 upperclassmen are underwriting those pianos and fellow students who seek to corner the market on fleece blankies.
Kevin Thompson, a co-instructor of the class at Butler University in which students run an insurance company. CreditStacy Able for The New York Times
If you still think insurance is boring, you haven’t really thought it through. The industry is at least partly about the fascinating science of human behavior, from recklessness to neglect, and our collective efforts to behave responsibly that never end in total success.
Still, insurance companies try to train and tame us. They provide a safety net for at least some of our inevitable failures at the same time that they charge as much in premiums as they possibly can.
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The industry does lack sex appeal, though.
Insurance’s obvious image problem is how Prof. Zach Finn came to be teaching it instead of doing it for a living. Not long ago, he assessed risk for the J. M. Smucker Company. (For the record, peanut butter poses more theoretical risk than jelly, owing to the higher likelihood of microbiological contamination and the greater risk posed by a plastic jar’s ability to fuel a warehouse fire.)
As he made his way through the industry, however, Professor Finn discovered that it had a risk management problem of its own: There were not enough young people seeking entry-level jobs.
Though the school had been insuring its telescope for $1 million, the replacement cost is closer to $2 million. The students also persuaded the university to spend $2,000 for a backup power unit to close the sliding roof panel above it. CreditStacy Able for The New York Times
Eventually he found his way to Butler, where he enthusiastically took on the usual load of faculty duties, plus unusual ones like serving as the faculty adviser to the Beta Lambda chapter of the national coeducational insurance fraternity, Gamma Iota Sigma. There is no hazing, save for some actuarial math. Nor is there a lot of booze. “We did bring in the risk manager from Jim Beam to speak one year,” Professor Finn said.
The student-run insurance company was born of a brainstorm with Michael M. Bill, the co-founder and chairman of MJ Insurance, a local firm. MJ Insurance eventually offered up $250,000, in part to help the student-run company get square with its Bermuda regulators.
Yes, the student insurers get to travel there to learn more about the industry. No, it’s not a boondoggle. In fact, the trip to Bermuda is something of an inspiration once they meet their peers. “Working in insurance and risk management is really desirable among the young people from there,” said Anna Geist, a junior who serves as treasurer and vice president for casualty underwriting at the student company.
To the students, learning by doing through an on-campus insurance entity makes intuitive sense. They may even have a competitive advantage. “We go here,” said Josh Toly, a Butler senior who is the student company’s chief marketing officer and vice president for property underwriting. “We know the ins and outs of the buildings better than a standard insurance company would.”
Marcus the bomb-sniffing dog at the Butler University Police Department. The student-run insurance company holds his life insurance policy. CreditStacy Able for The New York Times
The students set out to prove it as the company began operations recently. Insuring the lives of Trip, the famous Butler bulldog, and Marcus, the not-so-famous campus bomb-sniffing dog, turns out to be relatively simple. The students stay away from more complicated matters like insurance to cover biting, since any theoretical claim might create problems related to certain student privacy laws and regulations.
They also track each of the university’s dozens of Steinway pianos through a detailed spreadsheet and set premium prices in part through shopping other carriers. The complexity of underwriting the pianos comes from context, Professor Finn said. “In terms of the risks of specific Steinways, they’re inherent in who has it and where it is and how it’s cared for,” he said. “Is it a Steinway with an idiot frat member with a beer, or is it in a recital hall?”
The students do not have carte blanche to raise piano premiums to the moon just to see how much money they can extract from university finance administrators who are keen to provide a learning experience. “If we overinsure, we’re wasting money,” Professor Finn said. “But if we underinsure, well, that would be the day the music died.”
All undergraduates in the business school must start a company as part of their coursework, but administrators have traditionally set certain parameters. Food service, for instance, used to be off limits, given the risk of poisoning people. But the student-run insurance company, which provides coverage for all of the student enterprises, figured out how to cover those start-ups, in part by codifying the minimum amount of coverage the company requires the suppliers themselves to have.
Prof. Zach Finn once assessed risk for the J.M. Smucker Company. Now he advises Butler University’s student-run insurance company, which offers the school coverage for its mascot and other important property. CreditStacy Able for The New York Times
The premiums the students charge the university are not cheaper than the coverage that their company is replacing. So the students try to win on service, sniffing out risks that the school might have overlooked.
Take the university’s telescope, for instance. Though the school had been insuring it for $1 million, the students discovered that the replacement cost was closer to $2 million. Moreover, the equipment could be exposed, quite literally, if the observatory’s sliding roof panel was ever open during a storm, especially if the power went out and the mechanism to close it did not work.
This had happened at least once in the past. “There would be a Ph.D. running like crazy to shut it down, and perhaps that would be the day they tripped and rolled their ankle,” Professor Finn said. The students persuaded the university to spend $2,000 for a backup power unit for the panel.
Things don’t always go so smoothly. While taking a close look at the physical environment surrounding the rare books in the library, the students saw that drains above some of the valuable objects were leaking.
Stock quotes streaming in a conference/trading room at Butler. “We know the ins and outs of the buildings better than a standard insurance company would,” said Josh Toly, a Butler senior.CreditStacy Able for The New York Times
But if you’re an undergraduate and you need to work with a librarian twice or three times your age to fix what seems, to an insurance underwriter, like an urgent problem, it can be delicate.
So did the students issue recommendations or give orders? “Both,” said Derek DeKoning, the senior who serves as the student insurance company’s chief executive. And did the librarians consider him and his colleagues to be useful or just uppity? “Probably a little bit of both,” he said.
Indeed, the librarians’ dean had a talk with Professor Finn’s dean, and he eventually apologized for the fact that the staff felt a bit blindsided.
“They are our allies now,” Professor Finn said. “But this is what you don’t get in a textbook: how to not freak out a librarian and then how to get him or her unfreaked out if you do.”
Correction: February 13, 2018 
A earlier version of a picture caption with this article misidentified an instructor of a class at Butler University that operates an insurance company. He is Kevin Thompson, not Zach Finn.
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The Key to Weight Loss Is Diet Quality, Not Quantity

CreditAndrew Sondern/The New York Times
Anyone who has ever been on a diet knows that the standard prescription for weight loss is to reduce the amount of calories you consume.
But a new study, published Tuesday in JAMA, may turn that advice on its head. It found that people who cut back on added sugar, refined grains and highly processed foods while concentrating on eating plenty of vegetables and whole foods — without worrying about counting calories or limiting portion sizes — lost significant amounts of weight over the course of a year.
The strategy worked for people whether they followed diets that were mostly low in fat or mostly low in carbohydrates. And their success did not appear to be influenced by their genetics or their insulin-response to carbohydrates, a finding that casts doubt on the increasingly popular idea that different diets should be recommended to people based on their DNA makeup or on their tolerance for carbs or fat.
The research lends strong support to the notion that diet quality, not quantity, is what helps people lose and manage their weight most easily in the long run. It also suggests that health authorities should shift away from telling the public to obsess over calories and instead encourage Americans to avoid processed foods that are made with refined starches and added sugar, like bagels, white bread, refined flour and sugary snacks and beverages, said Dr. Dariush Mozaffarian, a cardiologist and dean of the Friedman School of Nutrition Science and Policy at Tufts University.
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“This is the road map to reducing the obesity epidemic in the United States,” said Dr. Mozaffarian, who was not involved in the new study. “It’s time for U.S. and other national policies to stop focusing on calories and calorie counting.”
In a new study, people who ate lots of vegetables and whole foods rather than processed ones lost weight without worrying about calories or portion size. CreditAndrew Scrivani for The New York Times
The new research was published in JAMA and led by Christopher D. Gardner, the director of nutrition studies at the Stanford Prevention Research Center. It was a large and expensive trial, carried out on more than 600 people with $8 million in funding from the National Institutes of Health, the Nutrition Science Initiative and other groups.
Dr. Gardner and his colleagues designed the study to compare how overweight and obese people would fare on low-carbohydrate and low-fat diets. But they also wanted to test the hypothesis — suggested by previous studies — that some people are predisposed to do better on one diet over the other depending on their genetics and their ability to metabolize carbs and fat. A growing number of services have capitalized on this idea by offering people personalized nutrition advice tailored to their genotypes.
The researchers recruited adults from the Bay Area and split them into two diet groups, which were called “healthy” low carb and “healthy” low fat. Members of both groups attended classes with dietitians where they were trained to eat nutrient-dense, minimally processed whole foods, cooked at home whenever possible.
Soft drinks, fruit juice, muffins, white rice and white bread are technically low in fat, for example, but the low-fat group was told to avoid those things and eat foods like brown rice, barley, steel-cut oats, lentils, lean meats, low-fat dairy products, quinoa, fresh fruit and legumes. The low-carb group was trained to choose nutritious foods like olive oil, salmon, avocados, hard cheeses, vegetables, nut butters, nuts and seeds, and grass-fed and pasture-raised animal foods.
The participants were encouraged to meet the federal guidelines for physical activity but did not generally increase their exercise levels, Dr. Gardner said. In classes with the dietitians, most of the time was spent discussing food and behavioral strategies to support their dietary changes.
The new study stands apart from many previous weight-loss trials because it did not set extremely restrictive carbohydrate, fat or caloric limits on people and emphasized that they focus on eating whole or “real” foods — as much as they needed to avoid feeling hungry.
“The unique thing is that we didn’t ever set a number for them to follow,” Dr. Gardner said.
Of course, many dieters regain what they lose, and this study cannot establish whether participants will be able to sustain their new habits. While people on average lost a significant amount of weight in the study, there was also wide variability in both groups. Some people gained weight, and some lost as much as 50 to 60 pounds. Dr. Gardner said that the people who lost the most weight reported that the study had “changed their relationship with food.” They no longer ate in their cars or in front of their television screens, and they were cooking more at home and sitting down to eat dinner with their families, for example.
“We really stressed to both groups again and again that we wanted them to eat high-quality foods,” Dr. Gardner said. “We told them all that we wanted them to minimize added sugar and refined grains and eat more vegetables and whole foods. We said, ‘Don’t go out and buy a low-fat brownie just because it says low fat. And those low-carb chips — don’t buy them, because they’re still chips and that’s gaming the system.’”
Dr. Gardner said many of the people in the study were surprised — and relieved — that they did not have to restrict or even think about calories.
“A couple weeks into the study people were asking when we were going to tell them how many calories to cut back on,” he said. “And months into the study they said, ‘Thank you! We’ve had to do that so many times in the past.’”
Calorie counting has long been ingrained in the prevailing nutrition and weight loss advice. The Centers for Disease Control and Prevention, for example, tells people who are trying to lose weight to “write down the foods you eat and the beverages you drink, plus the calories they have, each day,” while making an effort to restrict the amount of calories they eat and increasing the amount of calories they burn through physical activity.
“Weight management is all about balancing the number of calories you take in with the number your body uses or burns off,” the agency says.
Yet the new study found that after one year of focusing on food quality, not calories, the two groups lost substantial amounts of weight. On average, the members of the low-carb group lost just over 13 pounds, while those in the low-fat group lost about 11.7 pounds. Both groups also saw improvements in other health markers, like reductions in their waist sizes, body fat, and blood sugar and blood pressure levels.
The researchers took DNA samples from each subject and analyzed a group of genetic variants that influence fat and carbohydrate metabolism. Ultimately the subjects’ genotypes did not appear to influence their responses to the diets.
The researchers also looked at whether people who secreted higher levels of insulin in response to carbohydrate intake — a barometer of insulin resistance — did better on the low-carb diet. Surprisingly, they did not, Dr. Gardner said, which was somewhat disappointing.
“It would have been sweet to say we have a simple clinical test that will point out whether you’re insulin resistant or not and whether you should eat more or less carbs,” he added.
Dr. Walter Willett, chairman of the nutrition department at the Harvard T. H. Chan School of Public Health, said the study did not support a “precision medicine” approach to nutrition, but that future studies would be likely to look at many other genetic factors that could be significant. He said the most important message of the study was that a “high quality diet” produced substantial weight loss and that the percentage of calories from fat or carbs did not matter, which is consistent with other studies, including many that show that eating healthy fats and carbs can help prevent heart disease, diabetes and other diseases.
“The bottom line: Diet quality is important for both weight control and long-term well-being,” he said.
Dr. Gardner said it is not that calories don’t matter. After all, both groups ultimately ended up consuming fewer calories on average by the end of the study, even though they were not conscious of it. The point is that they did this by focusing on nutritious whole foods that satisfied their hunger.
“I think one place we go wrong is telling people to figure out how many calories they eat and then telling them to cut back on 500 calories, which makes them miserable,” he said. “We really need to focus on that foundational diet, which is more vegetables, more whole foods, less added sugar and less refined grains.”
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