The paper firstly examines the way in which U.K. mutuals operate and the forces which are leading mutuals to consider demutualisation. Demutualisation is normally accomplished by a Scheme of Transfer under Section 49 of the Insurance Companies Act 1982. The role of the directors and actuaries is discussed, including the impact of the Institute's latest Guidance Note (GN15).

The protection of policyholders' reasonable expectations, the value of membership rights and the basis of dealing with any orphan surplus are the central problems. The paper examines them in the context of both the open fund and closed fund situation and shows how they may be resolved.

A simple model is used to project the financial position of both an open and closed fund in a demutualised company. The relative advantages and disadvantages of each indicate that different courses of action may be appropriate for mutuals in differing financial positions.

This paper presents the results of research into the marketing of the actuarial profession including a SWOT analysis, public awareness and image of the profession amongst target groups (general public, undergraduates, journalists, company directors, pension scheme trustees and insurance intermediaries), and the desire to allocate more resources to the profession's public awareness and image. The paper also contains an analysis of the national press coverage achieved by the profession and reports on developments in North America where a task force on strengthening the actuarial profession has been set up.

The Presidential Address visits some of the current issues affecting the actuarial profession and expresses some personal views of the President. Subjects covered include with-profits policies, life assurance withdrawals and disclosure, Europe, education (concerning both actuarial examinations and continuing professional education), general insurance and pensions. The Address demonstrates the need for proactivity in a world which is continually changing, which is the theme of the 2-year presidency.

The paper was prepared by an informal working party as an introduction to an open forum discussion. It considers from several viewpoints the relationship between the actuary and the computer, both in its function as a calculating tool and as a data processing and storage medium. The paper considers in detail the requirements of the Appointed Actuary for adequate data, the problems of allocating and pricing for computer costs and the increasing uses of computer modelling in financial reporting. The place of computer literacy in actuarial education, future developments and standards are also considered.

EXD6: The purpose of this draft Guidance is to enable the actuary, in the interests of his client, to determine the appropriate method and assumptions for calculating pension costs, while recognising and interpreting, in the actuarial context, the requirements of SSAP 24.

EXD7: The purpose of the proposed Guidance results from a report from the Occupational Pensions Board: ‘Protecting Pensions: Safeguarding Benefits in a Changing Environment’. This recommended that bulk transfers of members without consent from one pension scheme to another should be permitted only if the actuary believes that certain conditions have been fulfilled to protect the interests of members and that in this context Professional Guidance should be given.

EXD8: This draft Guidance results from a request from the DSS to provide Professional Guidance in connection with the implementation of those provisions of the Social Security Act 1990 regarding the determination and application of the ‘valuation surplus’ to provide Limited Price Indexation for pensions in payment.

It is demonstrated how existing actuarial graduation practice, used in the construction of life tables, can be extended to considerable effect by formulating the techniques within the generalised linear and non-linear modelling framework.

The Institute of Actuaries and the Faculty of Actuaries have embarked on a joint planning exercise with a view to developing a more proactive profession, by focusing the attention and energy of members and ensuring effective use of scarce financial and human resources. ‘Strategy for the 1990s’ sets the overall framework of key objectives, which were agreed by a historic joint meeting of the Councils of the Institute and the Faculty on 4 March 1991.

The actuary's expertise in the field of life insurance lies mainly in the application of mathematical and statistical techniques to the wide range of issues associated with life insurance business. In particular, the actuary has developed very sophisticated tools for modelling and forecasting and to help in establishing equity between policyholders. In recent years, owners of such businesses, be they policyholders or shareholders, have been coming to depend increasingly upon the actuary's skills to establish value for their overall business. On an ongoing basis, these requirements relate to such things as the need for more complete balance sheet presentation in the case of a proprietary company. Additionally, and inevitably, the actuary is drawn into the world of financial dealing in respect of takeovers and mergers where he is becoming exposed to the commercial risks inherent in being an ‘expert’. The stakes are increasing and in the larger cases hundreds and even thousands of millions of pounds are involved. In this world, the actuary can expect to be subject to a range of pressures from clients, media, takeover rules and so on, all of which are well removed from the actuary's traditional comfort zone. As the stakes increase, so does the threat of litigation.

The authors have recently been involved, one as principal and one as actuarial adviser, in the largest hostile takeover in the life insurance industry in the U.K. and, in the process, many issues of significance to the individual and the profession as a whole were exposed. This paper is intended to address this very important area and to flag some areas which could prove to be of increasing concern to the individual and to point to some where the Institute may wish to become involved.

This article discusses the formulae for the select and ultimate exposed-to-risk in the CMIB's mortality studies, and certain statistical aspects of these investigations. It is shown that there are difficulties in the traditional binomial approach to the distribution of deaths, particularly for select rates, and the use of the Poisson distribution, rather than the binomial, is advocated.

This note continues a regular series on mortality rates in Great Britain , showing the mortality experienced in each age-group in 1989 and comparing this for broad age-groups, on a standardised basis, with mortality in earlier years.

In this paper we present an approach to the graduation of select mortality data and we illustrate this approach by graduating the CMIB's data for Female Permanent Assurances 1979–1982. The difference between our approach and that of the CMIB is that we graduate simultaneously by attained age and duration since selection.

Continuing process of updating company classifications.

Ninety-six constituents deleted during 1990—many as a result of strengthened casualty rule. Only 74 replaced—reflecting difficulty in finding suitable new non-industrial constituents.

Agencies, Overseas Traders and Publishing & Printing groups discontinued at the end of the year, but Business Services, Electricity and Media introduced. Leisure renamed Hotels & Leisure.

This paper derives second moments of estimates of the parameters in the chain ladder model. Thus, the so-called link ratios, and proportions of ultimate claims for each development year are considered. This enables confidence statements about the chain ladder parameters to be made with statistical rigour. The methods are illustrated using 6 sets of real data taken from the DTI returns.