ASK A CASUALTY ACTUARY

As a spreadsheet user, have you encountered any bugs of consequence?

Not long ago I was reviewing an exhibit for a report to a client. A key number seemed much smaller than I had expected. That number was the total of a column of numbers-hardly a heavy-duty calculation. One didn't have to be a math whiz to see that the total should have been about twice as big as it was.

In the past when that had happened, the problem was that the range of cell references was inaccurate. I checked the formula in the cell; it was correct. We had instructed the computer via our software to add the correct range of numbers.

Why wasn't it doing what it was told to do? My next thought was to see if somehow the calculation mode was not "automatic," as manual recalculation is a mode one can select for the spreadsheet. It was in automatic recalculation mode.

How could this be? Was it possible that there was some invisible character in the cell formula that was causing the computer to not add up the proper range of numbers? I retyped the formula that was already in the cell. Immediately, the correct sum appeared in the cell. Was it an invisible character that had caused the problem?

We called the help line-from a speakerphone, so we could keep working while being put on hold for a long time until someone was available to speak. After advising the long-awaited respondent of the problem, he told us this kind of situation could arise from a bug in the software. If we inadvertently had activated this bug in our use of the spreadsheet, it would not leave any tracks. It simply would prevent the spreadsheet from updating automatically or consistently.

The respondent advised us to visit the software's technical support Web site, where we got a printout on this bug's anatomy and behavioral tendencies. To our surprise, the advisory on this had been on the Web site for the last year and a half! Despite the fact that we were registered owners of the software during that entire time, we did not receive any letter advising us of the problem and offering us a way to exterminate the bug.

I became dizzy and nearly tottered out of my chair onto the floor. My faith in the accuracy of my spreadsheet software had been openly challenged. In my queasy state, I contemplated the fact that, as a consulting actuary, I make a living by selling the results of spreadsheet calculations.

Next, visions of the sweeping product disclaimer of the typical software maker flashed in my mind. I grabbed the license agreement. The software had been provided "as is." All warranties, either express or implied, had been disclaimed.

The agreement further advised me that under no circumstances would the software maker be liable for any damages of any kind. The only comfort I found were in the closing words, which noted that in certain states, liability for certain kinds of damages could not be excluded or limited. Not surprisingly, those states were not listed.

I was now ready to add another caveat to my reports. In spite of all our best efforts to nab errant bugs in the spreadsheet software we had used, some still could remain. I felt an obligation to warn our clients that our reports should be received "as is," much like the rusting, dented used car on the corner sales lot. I felt even more ill.

A more sane approach popped into my head: I again visited the Web site. Were there other bugs inhabiting our software? Yes. I considered writing about these bugs but stopped after I read a "statement of confidentiality" that told me I couldn't disseminate such information. All I can say is, visit your software manufacturer's Web site and hunt for patches, noting what they are intended to fix. If there is even the remotest chance you need the patch, get it off the Web site or order it.

Would you like advice from an experienced colleague on a risk management, benefit management or actuarial problem? Four quarterly features in the Perspective section of Business Insurance can give you some answers.

Ask A Casualty Actuary, Ask A Benefit Actuary, Ask A Benefit Manager and

Ask A Risk Manager answer written questions from readers on risk and benefit management issues and actuarial problems.

This month's column on actuarial issues in the casualty field is written by Richard E. Sherman, president of Richard E. Sherman & Associates Inc. in Ashland, Ore. William J. Miner, an actuary with Watson Wyatt Worldwide in Chicago, answers actuarial questions in the benefits field. Christopher E. Mandel, director-risk management at PepsiCo Restaurant Services in Louisville, Ky., answers risk management questions. And Dennis J. Nirtaut, managing director of compensation and benefits for Andersen Worldwide S.C. in Chicago, answers questions on employee benefit plans.

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