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On The Valuation of Whole-Life Industrial Assurances, with allowance for Lapses

Published online by Cambridge University Press:  18 August 2016

Extract

The subject of lapses or secessions has received comparatively little attention from writers in the Journal of the Institute. The question of secessions in connection with the valuation of Friendly Societies has been incidentally dealt with by Mr. G. F. Hardy (vol. xxvii, p. 312), and Mr. A. W. Watson (vol. xxxv, p. 313). Mr. A. Hunter, in his paper on “The effect of using the Lapse Element in calculating Premiums and Reserves” (vol. xxxvi, p. 51), makes some interesting comparisons of policy reserves, with and without allowance for discontinuances, but limits his investigations to the first 10 years of assurance, with a rate of exit over that period deduced from the tabulated HM data. One of the present writers has also contributed to the Journal (vol. xxxiii, p. 164) an account of the methods followed and results arrived at in the valuation, with and without allowance for lapses, of Clerks' Associations granting benefits to their members during unemployment, but the results arrived at are, of course, only applicable to those particular Societies.

Type
Research Article
Copyright
Copyright © Institute and Faculty of Actuaries 1904

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References

page 542 note * The difficulty of a mathematical proof is, as will be readily seen, increased by the fact that the usual relation does not hold between the annuity-value wdā x , with allowance for lapse and mortality, an d th e single premium for the assurance payable on death (with allowance for lapses) d(w x .