The President of the Institute of Actuaries was in the Chair. The opener prefaced his formal remarks as follows:

I would first of all like to say how pleased and honoured I feel to have been asked once again to take a part in the proceedings of this Society, particularly as this must be regarded as a special occasion since we are honoured by the presence in the chair of you, Sir, the President of the Institute, and also because this meeting is in the nature of an experiment.

It may be within your recollection, Sir, that on the first occasion, some thirty years ago, when I was asked to take part it was also an experiment. We met at the Old Bell and my part was in what has come to be known as Heath's play. It was therefore not so much a surprise to me, as it might have been to some, when three or four months ago the Chairman of the Society telephoned me and asked me to take part in another experiment, mentioning a symposium. Being one of those who dodged compulsory Greek in my undergraduate days I temporized. I consulted a Pocket Oxford Dictionary and found that my memory had not let me down: ‘symposium = a Greek drinking party’. Pursuing the matter further, I consulted the larger edition: ‘symposium = a drinking party, a convivial meeting for drinking and conversation’, and the only example it gives of the use of the word, ‘our symposium at the King's Head broke up, 1787’. This seemed conclusive and, remembering the symposia I had enjoyed with Alan Gardner in the past, I agreed to come along. I was a little disturbed when I received the notice of meeting which mentions a review, but I concluded this was just a printer's error for revue, although I thought the title unusual. My doubts were quite set at rest on Monday when you yourself announced in this Hall that the Society would meet tonight for a symposium.

The past 25 years have brought dramatic improvements in mortality rates in Great Britain. Infant mortality is now about 40% of what it was a quarter of a century ago: death-rates for children have been reduced to less than 1 per 1000. Not only children have benefited; young adults in the 15–44 age-group experience mortality little more than a third of what it was in the early thirties, whilst women aged 45–64 have had an improvement of about 40%.

It is therefore regrettable that the experience of men aged 45–64 is a black spot in the general picture. The improvement for men in this age-group has not kept pace with that for women of the same age, being only about 15% in 25 years, little more than ½% a year. Table 1 compares the death-rates for men and women in post-war years and demonstrates very clearly how over a period of 12 years the ratio of male to female mortality has steadily increased.

These remarks were set down in 1958 before the Insurance Companies Act 1958 was enacted. The new Act is a consolidating Act and, apart from a few alterations to achieve greater clarity, makes no alteration to the law as it affects Life Assurance business.

The new Act does not, however, include the former Schedules 1 to 5 of the Assurance Companies Act 1909 but leaves the Board of Trade to prescribe them. (Reference is made in these remarks to the powers previously available to the Board of Trade.) The Act required the Board of Trade to prescribe appropriate Schedules without delay and, in fact, the original 1909 Act Schedules have been prescribed without change.

It is understood that this is essentially a temporary measure, as the time available was not sufficient to allow adequate consideration to be given to any possible changes. It is, however, expected that the Schedules will be revised in the relatively near future.

The Registrar-General's Decennial Supplement, England and Wales, 1951, Life Tables, was published in February of last year. Following the established custom, it includes the report of the Government Actuary, Sir George Maddex, who was asked to prepare National Life Tables showing the level of mortality at the time of the 1951 census. The new life tables are presented in Appendix IV, and it is the aim of this paper to draw attention to the features which are of interest to actuaries concerned with Industrial Life Assurance.

The aim of this paper is to illustrate in some detail a practical approach to the process of forming a judgment of the investment scene as it is likely to be presented to the U.K. investor. It falls into four parts, namely:

1. Theoretical base.

2. Survey of type of variations in stock markets and the factors affecting them.

3. Methods of diagnosing trends.

4. An approach to forecasting.

The last part occupies only a small proportion of the space since the formation of a judgment in investment work, as in most other fields, is only ‘10% inspiration’.

This paper describes a scheme for the automation of an industrial assurance office. No advice has been sought from manufacturers and the method has not been tested on a computer. The aim is to stimulate discussion of the subject and to help students to form an opinion as to whether, and to what extent, a computer can be of use in this type of work. Those students who are unfamiliar with the terms used in discussing electronic computers or industrial assurance are recommended to read §§VII and VIII of the paper first.

This subject can appear difficult, but the main idea is delightfully simple. Let us consider an example. Suppose that a life office has issued policies at premiums based on a certain rate of interest, investing in Stock Exchange securities the premiums received from year to year, less claims, and that after a time the rate of interest rises permanently. The market value of the investments will fall and the office will lose if they have eventually to be sold, but will gain to the extent that future premiums can now be invested on more favourable terms. The gain is fixed but the loss will vary according to the redemption dates of the assets, since the longer the date, the greater the fall in value. Immunization consists in selecting investments such that the loss balances the gain. An alternative way of looking at it is on the basis of present values. The values of the assets on the one side of the balance sheet, and the net liabilities on the other, will both fall if interest rates rise. We want them to fall by the same amount, and as our liabilities are fixed, we must seek to achieve that result by a suitable choice of assets.

When closing the discussion on the Finance Act, 1956, at the Sessional Meeting held at the Institute in November 1956, A. G. Simons commented that the Act would take a little while to settle down and really be appreciated, and it was a pity, therefore, that some of the younger members of the Institute had not given their views, because they were the ones who would have to handle it in the future.

If the thoughts expressed in this paper encourage a lively discussion amongst the younger members then it will have achieved its object.

It has been remarked on many occasions that whilst there is a plethora of material which has been contributed to the Institute and the Students' Society on the actuarial valuation of liabilities, the subject of valuation of assets seems to have been consistently overlooked by all save one or two authors. We believe that a compelling reason for this apparent indifference to the subject may be found in the trend of interest rates within the experience of the actuaries who introduced the valuation techniques which a student may now tend to take for granted.

Consider Table 1, compiled from information given in a paper by C. M. Douglas, F.F.A., on ‘The Statistical Groundwork of Investment Policy’. During the period 1833–1912 the average annual rate neither exceeded £3. 11s. od.% nor fell below £2. 9s od.%, and in general the yield drifted slowly downwards.

Just over four years ago I had the pleasure of presenting a paper to the Students' Society on some aspects of non-life insurance (J.S.S.13, 139) and I would first like to thank the Society for again giving me an opportunity of putting on paper some further ideas which have largely flowed from my interests in the non-life field. Frankly this paper is of an exploratory nature and suffers from all the defects of reporting continuing experimental work. I hope therefore that the many obvious loose ends will be viewed in this light and that members will be able to sense the excitement of this relatively undeveloped field.

The purpose of this paper is not to provide a guide through the various papers that have appeared relating to the three related topics of retention, reinsurance and risk but rather to provide an elementary approach to these problems with the object of stimulating interest in some aspects of actuarial practice which are largely regarded as lying in the realm of ‘experience judgment’ but which are capable of precise formulation against a background of mathematical statistics.

Part of the formal business of the meeting of the Congress of Actuaries consisted in the modification of the rules of the Permanent Committee to provide for the formation of sections concerned with the study of special subjects. The first of such sections, to be known as ASTIN and concerned with the application of modern mathematical and statistical methods to non-life insurance, was also formed during the Congress. Dr Paul Johansen of Copenhagen, a corresponding member of the Institute, was elected Chairman of ASTIN and R. E. Beard of London was elected Secretary.

Section IVa, Analytical Expressions of the Risks involved in General Insurance, was of great interest to those actuaries interested in ASTIN, and the following notes have been prepared on the sixteen papers submitted in an endeavour to indicate the type of problem being considered by the new section of the Permanent Committee.

This paper attempts to set out some of the points of detail in the administration of a privately administered pension fund based on the practical experience of a large fund. The solutions offered to the problems arising have necessarily been reached in the context of a particular fund and do not claim to be the only, or even the best, answers for other funds; indeed the very problems may be different in other funds, particularly in smaller ones.

It seems essential, therefore, to describe the main features of the fund in question.

This paper was intended to be a further paper in the series that has been presented to the Students' Society featuring the work of the Actuary overseas. The first was T. R. Suttie's paper, ‘The Actuary in Canada’ (J.S.S.13, 199), and subsequent papers were by D. Drybrough, ‘Life Assurance in Australia’ (J.S.S.14, 1), and by de Smidt, Williams and Rodger, ‘The Actuary in South Africa’ (J.S.S.14, 348). In view of the fact that a number of British actuaries are now working in the United States, it was thought that a further paper might deal with the position there, despite the difference that in this case actuaries do not look to the Institute and the Faculty as the seats of learning, although Spurgeon's text-book was until recently an official text-book for the Society of Actuaries.

The objects of this paper are to consider how a life office in the United Kingdom might approach the question of using electronic data processing equipment and to indicate some of the problems which will be encountered—without, I am afraid, supplying all the answers. There are in fact very few questions on this subject to which a general answer can be given. Although a good deal can be gained from exchanging information and ideas, it will ultimately be up to each individual office to solve its own particular problems.

Many of the difficulties one meets in discussing this subject arise from the widely differing circumstances in the various offices. Each person naturally tends to approach the problem from the point of view of his own office, and consequently suggests different answers partly because he is considering different questions. I have therefore felt it desirable to limit the scope of the paper, and since there are important differences between the offices which transact industrial assurance and those which do not, I propose to confine my attention to the problems of an industrial/ordinary office. A further limitation is that group business is not discussed.

The original purpose of this paper was to help students working for Parts IIIC and IVB of the Institute examinations and the equivalent sections of the Faculty examinations. The large majority of students have never been inside a consultant's office, have little or no practical experience of the subjects involved and seem to find these parts of the examinations extremely difficult because of their lack of practical knowledge. The paper does, however, seem to have expanded beyond its original aim into a general discussion of the practice and organization of a consultant's office, but it is hoped that at least part of the original intention has been fulfilled. It is written largely from the point of view of the staff carrying out the technical work in such an office. Perhaps it should be stated at the outset that it also refers mainly to one particular firm of consultants. The first part of the paper is concerned with a broad description of the services provided by a full-time consulting actuary and the necessary office organization and the remainder describes the particular features of the various types of work undertaken.

In working his way through the Institute syllabus the student deals in Section C with subjects rather baldly described as ‘Sources of National Income and Expenditure’, ‘Introduction to Government Finance’, and at a later stage, with the money market and banking and financial institutions. What disciplines these impose on the student I have only a vague idea for I am now a ‘vintage’ actuary in the sense that this is used as being synonymous with ‘old crock’. However, I see from the Year Book that ‘members of the profession are recognized as especially competent to advise on financial problems’ and I take it that the purpose of this meeting is to help newly qualified actuaries towards the attainment of this special competence.

My subject tonight is the budget, and although it is given to few actuaries to advise on the making of the budget we must all know how to discuss it intelligently, for clearly our judgment of the national economy underlies our reading of nearly all other financial problems.

The word ‘switch’ has come to be used to describe a variety of operations in connexion with pension schemes. A scheme may be ‘switched’ from one life office to another; a scheme may be ‘switched’ from without-profits to with-profits; or the two operations may be combined. This paper attempts to deal, however, with an operation which is the direct result of the Finance Act 1956—the switching of a scheme approved under Section 388(1) of the Income Tax Act 1952 to a scheme approved under Section 379 of the same Act—and it is assumed that the operation takes place within the one life office.

The operation in question has its origin in the somewhat detached view of life taken by our legislators and by the administrators whose duty it is to advise them.

The subject of this paper and its companion paper dealing with privately administered schemes has received only scant attention in our discussions, although it is of great importance to employers who have pension schemes. It is hoped to promote a discussion on the administrative problems which arise from time to time in schemes and to that end those which have arisen in the assured schemes described in this paper are set out later.