The vitality displayed by the English Friendly Societies in face of the competition of the compulsory system of National Health Insurance is such as to justify the allocation to the societies of a reasonable part of the time which the Institute devotes to the study of problems of professional interest; and their claim for a share of our attention is strengthened by the fact that the day of the unqualified “valuer” has nearly passed, and that the work of advising the societies on the actuarial aspects of their relatively complex undertakings is now almost everywhere entrusted to Fellows of the Institute or of the Faculty.

The merits and demerits of the present mode of assessing the Property and Income Tax have been so frequently made the subject of popular discussion, and are in themselves questions of such national importance, that I feel no apology to be necessary for again bringing the subject under the notice of the Institute of Actuaries.

A valuable paper on the inequitable operation of this tax was, some time ago, read before the Institute by Mr. Jellicoe; and, more recently, an elaborate and important contribution on the same subject was brought by Mr. Farr under the notice of the Statistical Society of London, which paper has given rise to a lengthened and very interesting discussion. An exceedingly temperate and able pamphlet has also been recently published by Mr. John G. Hubbard, the Deputy Governor of the Bank of England, in which that gentleman has discussed, with very considerable ability, the views of Mr. Warburton, and has, in my opinion, very effectually exposed their absurdity.

As there is a prospect of the Scottish Insurance Companies again collecting the statistics of their mortality experience, it is desirable to consider anew the mode in which the facts should be tabulated, in order to ascertain the rate of mortality experienced among assured lives. The previous collection was drawn from theexperience of 10 offices, and consisted of the total lives assured from the beginning of the several offices, brought down to 31 December 1863. Thirty years having elapsed, it is proposed to begin with the facts then existing—tabulating the deaths arising among these; and also to tabulate new assurances, dealing with them separately. It is proposed also to discuss whole-life assurances and endowment assurances. It is also proposed to collect the experience of male and female annuitants. With so large an undertaking in prospect, it is expedient to re-consider the modes previously adopted, and in some detail to state the manner in which these experiences should be now collected.

The 1993 Jubilee Lecture considered two fundamental questions addressed in the report of the Pension Law Review Committee: when an employee joins an occupational pension scheme, what should the law consider to be the fundamental pension promise; and how should that promise be protected? The factors affecting the employee's expectations are examined in the light of the pension promise, and the conclusion drawn that certain expectations relating to accrued rights should be protected by law, although the employer should be able to control its financial commitments as to future service. The status of surplus, in both an ongoing scheme and in the event of a wind-up, is also considered, and recommendations made as to the use of a surplus if not already dealt with by the scheme rules. The two principal forms of protection for the pension promise which were recommended by the Pension Law Review Committee are discussed; firstly, the introduction of a minimum solvency standard, backed up by tighter rules for the prompt payment of contributions and by enhanced monitoring and reporting requirements for scheme auditors and actuaries; and secondly, the setting up of a statutory compensation fund to cover a deficit in the event of fraud or theft, to be financed by a post-event levy on schemes.

Consolidation of the FTSE Actuaries Share Indices Series and of the FTSE Global Industry Classification System. Introduction of ‘free float’ weightings (in six bands) introduced in 2001.

The paper identifies two major trends in the economic and social history of the last 150 years, and discusses their effect on the actuarial profession. The major economic trend is globalisation, with which is associated specialisation of function. The major social trend is the gradual collectivisation of society. Neither of these trends has developed monotonically. Both have developed in a ratchet-like movement over time. Globalisation is reflected in the overseas expansion of British life assurance companies up to 1914, followed by an extended period of retrenchment before expansion was resumed in the last quarter of the 20th century. The effect of the collectivisation of society on the actuarial profession has been felt most acutely in an intensification of the regulation of financial services.

The Actuarial Profession is currently undertaking a review of its research strategy, and has decided to focus more resources on researching mortality developments. It is important that the profession is involved in partnerships with researchers from outside of the profession, bringing actuarial expertise into closer contact with other disciplines. We believe that collaboration between these different areas of expertise will provide important new insights in understanding mortality trends. This report represents the first step by the Mortality Developments Scoping Project Steering Group to map current research into mortality developments across a wide range of disciplines. The steering group is aware that the themes and literature discussed in this report are not exhaustive; however it does include areas of research not normally covered by the Actuarial Profession. The steering group welcomes comments on the report and suggestions for any areas which may not yet have been covered.

The main aim of this report is to provide an overview of the key areas of research into mortality developments across a wide range of disciplines, as well as areas of overlap and gaps in the research. The literature described is compiled from recommendations received by the Mortality Developments Scoping Project Steering Group from experts from different disciplines working in the area of mortality.

Key themes identified from recommended literature:

— the role of medicine in mortality reduction;

— the role of lifestyle and environment in mortality reduction, including smoking, socio-economic conditions and obesity;

— causes of death contributing to mortality reduction, in particular coronary heart disease;

— mortality reduction attributable to differing age groups;

— the relationship of active life expectancy to total gains in life expectancy;

— evidence of cohort effects on mortality improvement; and

— future trends in mortality developments.

Areas of overlap identified from recommended literature are:

— the overlap between literature examining the role of medicine in mortality decline and the influences on the decline in mortality from coronary heart disease; and

— the areas of overlap between various disciplines working in the field of mortality developments.

Gaps identified in recommended literature are:

— a lack of recommendations from social policy;

— few papers recommended on the role of lifestyle and behavioural factors on mortality;

— few papers recommended on causes of death other than coronary heart disease; and

— few papers recommended on potential threats to future mortality improvement.

The distinguishing feature of the New Experience which differentiates it from all others, is the division of the observations into various classes of assurance; and when our President did me the honour of asking me to contribute a paper, I thought I could not do better than invite your attention to the premiums which, according to that experience, ought to be charged for these classes, as it is of the greatest importance to insurance companies generally that the risks which they undertake should be at adequate rates. Some of us have suspected, others have known, that the fate of mortality varied according to the class of assurance, and that one table of mortality applied to all was not satisfactory; but it is now possible for the first time to arrive at definite conclusions on the subject, and to determine in many cases what the difference between them really is.

The two main objects of the paper are :—

(1) To ascertain what modifications in Makeham's Law are necessary in order that the principle of Uniform Seniority may be applied to the A1924–29 ult. table.

(2) To ascertain whether some approximate method is readily available for the calculation of joint life annuity values according to the A1924–29 ult. table.

As regards (1) developments of the suggestions put forward in the discussion following Mr. C. L. Stoodley's paper to the Faculty in February 1934 are examined, and the conclusion is reached that, while the results are somewhat disappointing so far as the A1924-29 table is concerned, some of the formulae brought out may yet prove of practical use when applied to a mortality table more free from heterogeneous matter.

In the second part of the paper the results of applying to the A1924–29 ult. table several standard approximate methods are first examined, and it is shown that such methods are liable to produce systematic errors when applied to this table. Two new methods of approximation are then developed, which are shown to yield much more satisfactory results, and tables are reproduced to facilitate the practical application of these methods.

Most of the published actuarial literature in the U.K. on immunization has been applied to the valuation of a life office. The authors have shown how the immunization techniques first introduced by Redington (3) in 1952 can be used to match the liability outgo of the office, to a greater or lesser extent.

The purpose of this paper is to introduce the student to the underlying concept of immunization and to show how it can be utilized to produce a guaranteed rate of return with a high degree of probability, irrespective of the future course of interest rate levels.

The term to maturity and duration (mean term) of a bond are discussed in §2. The maturity is only of limited help in characterizing a specific bond. The duration—a measure of the average time until the bond payments are received—is an easily determined figure which is more informative about a bond than maturity. The price sensitivity of a bond (i.e. volatility) is linearly related to the duration.

The important and laborious investigation of which we give the results in the following pages is the last serious contribution to statistical knowledge by Mons. Marco Besso, a Fellow of the Institute of Actuaries of some years' standing, and an insurance expert of wide experience and great repute throughout the continent. The paper was at first published in part in the Bulletin de l'Institute de Statistique, and a translation subsequently appeared in the German Annual Magazine of Herr Ehrensweig.