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A Comparison of the Values of Policies as Found by means of the Various Tables of Mortality and the Different Methods of Valuation in use among Actuaries (Messenger Prize winning Essay - 1868)

Published online by Cambridge University Press:  18 August 2016

Henry William Manly
Henry William Manly*
Affiliation:
London and Provincial Law Assurance Society.
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Extract

Life Assurance is an institution possessing such an important influence in the welfare and well-being of Society that it is most essential the principles upon which it is based and conducted should be such as to ensure its lasting stability and prosperity.

After a Life Assurance Office has been once established upon a firm basis, there is no part of its management so important as that relating to the periodical valuation of the liabilities under its policies. It is my object in this essay to inquire into the various methods adopted for that purpose in the present day; and to consider the various results they produce when different tables of mortality and rates of interest are employed in the calculations; and also to ascertain the effects which the employment of different data may have upon the present and future condition of an Office.

Type
Research Article
Information
Journal of the Institute of Actuaries , Volume 14 , Issue 4 , July 1868 , pp. 249 - 305
Copyright
Copyright © Institute and Faculty of Actuaries 1869

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References

page 250 note * “Observations on Reversionary Payments,” by Richard Price, D.D. (7th. Ed., edited by W. Morgan). 1812.

page 250 note † “A Treatise on the Valuation of Annuities and Assurances”, by Joshua Milne. 1815.

page 250 note ‡ “Treatise on Annuities, with numerous Tables, &c.,” by Griffith Davies, F.R.S.

page 251 note * “Law of Mortality, deduced from the Combined Experience of 17 Offices, embracing 83,905 Policies, of which 40,616 are distinguished by denoting the Sex of the Lives assured, and by classing them into Town, Country, and Irish Assurances”; printed privately for the Offices in 1843.

See also, “Annuities and Assurances calculated from a New Rate of Mortality amongst Assured Lives, &c.,” by Jenkin Jones. 1843.

page 251 note † “Life Tables, founded upon the Discovery of a Numerical Law regulating the existence of every Human Being, &c.,” by T. R. Edmonds, B.A. 1832.

page 251 note ‡ Philosophical Transactions of the Royal Society for the Year 1825.

page 251 note § Appendices to Registrar-General's 5th and 6th Reports.

page 251 note ¶ Appendix to Registrar-General's 12th Report.

page 251 note ‖ “English Life Tables, &c,” by W. Farr, M.D., F.R.S., D.C.L. 1864.

page 251 note ** “Report of John Finlaison, Actuary of the National Debt, on the Evidence and elementary Facts on which the Tables of Life Annuities are founded.—Ordered by the House of Commons to be printed, 31st March, 1829.”

page 251 note ‡ “Report and Observations on the Mortality of the Government Life Annuitants, by Alexander Glen Finlaison, Actuar y of the National Debt. 1860.—Ordered by the House of Commons to be printed, 25th August, 1860.”

page 253 note * Assurance Magazine, vol. xi., p. 107, line 3; and p, 246, line 4.

page 253 note † “The Chances of Premature Death and the Value of selection among Assured Lives.” By E. J. Farren. 1850.

page 258 note * “On certain Methods proposed for the Valuation of the Liabilities of a Life Assurance Company,” by Thomas Bond Sprague, M.A.; Assurance Magazine, vol. xi., p. 90.

page 259 note * “On the Proper Mode of estimating the Liabilities of Life Insurance Companies,” by Robert Tucker, &c. &c.; Assurance Magazine, vol. x., p. 312.

page 260 note * “On the Objectionable Character of certain methods very generally adopted for the Determination and Division of Surplus in Life Assurance Companies,” Assurance Magazine, vol. iii.; page 185.

page 263 note * “We believe that the statements contained in this paragraph require some correction, as the method of valuation in question is more generally used than Mr. Manly supposes; and is applicable, with proper modifications, to proprietary as well as mutual Offices.—ED. J.I.A.

page 290 note * This value is incorrectly printed in Jones, p, 538, as 36 808.

page 291 note * See also Registrar-General's 12th Report, Appendix, p. 61.