On the method of Dr. Johannes Karup of valuing in groups endowment assurances, and Policies for the Whole of Life by Premiums limited in number

Extract

Tht method, according to Mr. Altenburger (J.I.A., xxxv, 332), was devised by Dr. Karup in 1878, and communicated by him to the Austrian Government in 1882, and to the Swiss Government in 1884; but, unless perhaps in Germany, of which I have no knowledge, it does not seem to have been published until comparatively recently, and no doubt it has been discovered independently by other actuaries. So far as I am aware, the first account of it in the English language is that given by the late Wm. D. Whiting, in 1894, in the Transactions of the Actuarial Society of America, vol. iii, p. 427. Mr. Whiting wrote at the suggestion of an unnamed member of the Council of the American Society, and he does not say to whom the authorship of the formula should be attributed. The first reference in the Institute Journal is to be found in a letter of Mr. Julius Altenburger, in J.I.A., xxxiv, 152, and therefore the formula sometimes goes by his name, but he himself says that the name of Dr. Karup should be attached to it.

In the present note, attention is directed mainly to Endowment Assurances, and Policies for the Whole of Life by Limited Payments; but the method is available for many other classes, and its very general applicability is elaborately worked out by Mr. Frederick Bell in his paper (J.I.A., xxxix, 17) read before the Institute, 19 December 1904. The principles of the method are therefore well known, but, in so far as they have yet been developed, there remains a certain amount of rigidity which it is the object of this note to remove. Elasticity may be introduced, which will render the formula more convenient under the presentday varying conditions of British companies.