In recent years the statistical technique known as ‘sequential analysis’ has been developed to a considerable degree of refinement and applied in many varied fields. The technique may, however, be new to some readers, and some examples and illustrations of the application of sequential methods to data of the type encountered in actuarial work should therefore prove of interest.

The raison d'être of sequential analysis is the reduction of the average number of observations required to reach conclusions from observed data without altering the degree of reliability specified in the usual fixed sample size technique. If such a result can be achieved a saving in both time and money may be effected.

In the usual fixed-sample size techniques the size of sample necessary to achieve a given degree of reliability in the conclusions reached can be computed. However, in the course of the selection and examination of the sample it often becomes apparent, at quite an early stage, what form of conclusion is likely to be reached.