Further Remarks on the Valuation of Reversionary Life Interests

Extract

Nineteen years ago, in November 1868, Mr. Bailey communicated to the Institute (J.I.A., xiv, 437) some figures which showed in a very striking manner, the wide differences of opinion which formerly prevailed among actuaries, as to the terms upon which advances should he made upon the security of reversionary life interests. In the discussion which followed the reading of my paper “On the Valuation of Reversionary Life Interests”, he is reported to have said: “As showing the expediency of further “discussing the subject, he instanced a case which was submitted “several years ago to five well known actuaries, where the “redemption money for the contingent annuity was fixed hy A “at £282,000, by B at £237,000, by C at £184,000, by D at “£154,000, and by E at £47,000.” The differences here shown are certainly very remarkable, and not very creditable to the profession ; but, judging from certain figures which have lately come under my notice, I am inclined to think that the opinions of actuaries do not now differ so widely as formerly.