As we grapple with the problems of conducting non-life insurance in a world of high inflation, we should perhaps pause for a moment to look for historical analogies for our present predicament. Let us, then, look back at a distressing period many years ago in the history of the Kingdom of Carmania.

Inflation was by no means new to the citizens of Carmania. Year after year, all prices and incomes had been rising at a steady rate of 5% per annum. The economy functioned quite well, albeit in a rather uninteresting way, and the people were accustomed to the idea that the purchasing power of the Carmanian dollar would fall by roughly 5% every year. There were, however, some economists who argued that inflation was both undesirable and unnecessary, and prevailed upon the King to adopt some measures which, they assured him, would quickly reduce the rate of inflation to zero. The measures were adopted, and the following year the rate of inflation rose to 10%.

1. The paper sets out a brief description of the life assurance market in the Federal Republic of Germany (including West Berlin). The aim has been to highlight those aspects of the market, in particular the supervision system, which differ significantly from British practice. After a section giving some historical background, the main section outlines the present market and the paper concludes with a brief look at the future.

2. The paper is based on the impressions which we obtained in establishing a new branch office of a British proprietary life assurance company in Germany. The views expressed are, however, entirely personal. Our thanks are due to J. A. Langley and R. J. McCurrach, who assembled the statistical material.

1. It seems to be a common misconception outside the actuarial profession that those within that illustrious body are mysteriously able to peer into their crystal balls and come up with prophetic answers about the future progress of pension funds, insurance companies and other allied matters. The appearance of an actuarial report with its air of finality and disclosure of a definite surplus, deficiency, bonus declaration or whatever it may be, only endorses the impression that the actuary is reporting on the unique and unquestionable answer to the problem in hand.

1. It is some years since the application of sequential analysis to actuarial work was discussed in the Journal and the following paragraphs illustrate how the techniques may be used to help solve a current problem.

2. The data relate to the experience of one large office during the calendar years 1970–73. It corresponds to the returns made to the Continuous Mortality Investigation relating as it does to full premium business for assured lives at duration 2 and over. All the lives have been accepted at normal rates of premium and for convenience the two forms of acceptance (Medical and Non-Medical) have been combined.