Upon the selection of lives proposed for assurance depends, in no small degree, the measure of prosperity of a Life Assurance Company. So important is this selection that, considering the amount of attention given to other branches of actuarial science, it is rather surprising that in the past there has been a comparatively limited amount given by our profession to its study. Innumerable and valuable are the books and papers which have drawn information and lessons from our Tables of Mortality—Tables which form the foundation upon which the whole structure of Life Assurance is reared; but we need occasionally to be reminded that in reality those Tables themselves were based initially upon the selection of the individual life, and that consequently in our everyday work of selection we are consciously or unconsciously setting the standard of the great Mortality Tables of the future, which in their day will in turn vitally affect our business and its immense financial interests.

The Mathematical Theory of Probability has, as is well known, two main branches:

1°. Direct or Deductive Probability, in which the behaviour of a system is deduced from a knowledge of its constitution.

Thus the problem “What is the probability of throwing a double-six in a single cast of two dice” belongs to deductive probability, since we know the constitution of the dice–that they are symmetrical six-sided bodies–and from this knowledge we deduce the probability of a double-six.

And 2°. Inverse or Inductive Probability, in which the constitution of a system is inferred from its observed behaviour.

As an example of Inductive Probability, suppose we visit a rifle-range and find a man firing at the target. At first we know nothing regarding his skill as a marksman ; but after watching a few shots we are able to form a rough estimate of it, and this estimate becomes more sharply defined and more confident the longer we observe his performance , so that ultimately we attain to a trustworthy knowledge of his “constitution” as a marksman, i.e. we can assign the probability that his next shot will hit or miss.

The Council have pleasure in submitting their Annual Report.

At the last General Meeting certain changes were made in the Rules and Regulations regarding Examinations, but in November the circumstances occasioned by the War were such that the Council decided to abandon the Examinations which would in ordinary course have been held in April 1916. On this account it may be necessary before resuming the Examinations to make certain alterations in the dates mentioned in Bye-Law No. 5.