Many years ago the question of equitable distributions of surplus would have attracted much discussion. The subject received a full philosophical, financial and mathematical treatment, with the aim of getting it just right.

As time passed this subject became less precise. Wider variations in investment conditions and different investment strategies meant that the constraints of the usual bonus methods could only achieve rough justice. Premium rates and valuation bases remained fairly static (often quite rightly so), and the declared results seemed slightly arbitrary and perhaps a little conservative. The work of the traditional actuary seemed a little ‘stodgy’ and the challenge and activity turned to the field of unit linking.

Today the picture is different. Just as the introduction of banks to the personal mortgage market seems to have improved the service from Building Societies, so the advent of unit-linking seems to have spurred on the traditional actuary. The expectations of what can be achieved have increased. So, over the period that the methods for valuation, pricing and projection for unit linked contracts have achieved some measure of standardization, the traditional actuary has been pushed more into the role of the pioneer.