1.1. The FT-Actuaries share indices have now been published for about 11 years and calculated for a rather longer period. They have become accepted as one of the standard measures of equity share price movements. They represent a valuable contribution by actuaries in the field of investment analysis, indeed Heywood (1) states that he considered them to be the best public relations exercise of the Institute. (We assume here that he meant profession).

1.2. Yet, there are a considerable number of actuaries and actuarial students who have no more than a vague knowledge of its working, while most laymen are completely baffled by the mathematics involved. Haycocks and Plymen (2), in an extremely comprehensive and often very elegant paper, described the basic construction of the indices. But because they were actuaries addressing other actuaries they naturally used algebraic formulae. This, in itself, automatically ensures that most laymen in the investment field do not read beyond page 1.

1.1. The net premium method of valuation has been controversial ever since it was first advocated over a century and a quarter ago. Its merits and deficiencies have exercised the minds of actuaries whose names are legendary in actuarial science—men such as Finlaison, Jellicoe, Sprague, Manly, Bailey, Coutts, Elderton and Redington; it has been tested in practice against almost every kind of experience; and its demise has repeatedly been predicted. Nevertheless, although it has been modified somewhat over time, in principle it remains today firmly entrenched in life office practice. Consideration of it, even in modern times, has divided actuaries in old ways—the artist from the scientist, the theoretician from the practical man.

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%.

1.1. The effects of inflation are gradual, and are difficult to separate from the effects of other influences. This paper looks briefly at some of the effects in the past, and then takes a look into the future.

1.2. In the last seventy years this country has experienced three periods of rapid inflation. The first two were connected with the two major Wars. During the Wars the Government took action in the form of price controls and subsidies to restrain the growth in prices. We are now experiencing another bout of inflation (and another bout of Government action).

1.3. The recent inflation has not been a purely British phenomenon. It has been shared by most of the world. I. S. Friedman (1973) points out that action by individual countries is unlikely to succeed in beating inflation. In the absence of any concerted action, he concludes that inflation is likely to be with us for the foreseeable future.

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.

1.1. One of the declared intentions of the European Economic Community is the harmonization of Social Security arrangements, including State pensions. To the extent that occupational pensions are regarded as an adjunct to Social Security to bring total benefits up to an acceptable level, it is to be expected that the achievement of this aim would have its own effect on occupational pensions and on the way in which these pensions are financed.

1.2. In practice progress along this path has been slow and both Social Security and occupational pension systems differ widely from country to country within the E.E.C. On the one hand there are the U.K. and Ireland providing very small State pensions by comparison with most of our neighbours, and at the other extreme Italy, where State pensions are at such a high level for the whole working population that private pensions are virtually non-existent.

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.

This paper is the second edition of a paper presented last winter to the Glasgow Actuarial Students' Society and the Faculty of Actuaries Students' Society. It has been written with a view to giving some information to those who have no experience at all of property investment and also to stimulate discussion among the actuarial investment pundits. It has been written in the context of investment by old established Life Offices and large Pension Funds only (referred to as ‘Institutions’) unless the text states otherwise.

Part I is on similar lines to Binns, Chapter 16. Part II pursues some aspects in greater detail and is rather more opinionated, and it is hoped that those with experience of property investing will, in discussion, rise to the baits offered.

1.1. It is over 17 years since the paper ‘The Actuary in South Africa’ (1) was discussed. In South Africa as elsewhere great changes have taken place and it was felt appropriate to bring the position up to date. Nevertheless those interested are recommended to refer to the 1957 paper and not least to Mr R. G. Mallett's introduction to the discussion. Since the decision was taken to write this paper, Mr Spedding's paper ‘The Actuary in Australia’ (2) has been presented and to facilitate comparison, I have followed the general outline of that paper.

1.2. The South African currency is Rands and cents (100 cents equals one Rand). Since South Africa did not follow the United Kingdom devaluation of 1967 the parity was R. 12 equals £7 sterling but South Africa devalued at the end of 1971 and then R. 2 was almost the same as £1. At the time of writing the pound is roughly equivalent to 1·5 Rand.

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.

1. This paper is based upon experience derived and impressions gained from working as a foreigner in the Dutch life assurance market. The views expressed are essentially personal

2. In setting up a life assurance operation in a foreign country the factors to be considered are immensely complex and the decision to enter the market is merely the beginning of a long process of analysis and further decisions. In this paper I have made no attempt either to enumerate or to consider these factors. This is a descriptive paper and not an analytical one.

3. After a short historical review the broad elements which comprise the present Dutch market are discussed and finally I mention briefly what I see as some of the important trends and future possibilities for this market.

The origin of savings connected with human life was not a particularly happy one in France. A certain Neapolitan named Lorenzo Tonti submitted to Mazarin, the Finance Minister of ‘Sun King’ Louis XIV, a savings plan, the profits from which would help to replenish the sadly depleted royal coffers of this grandiose monarch. The plan was called a ‘Tontine’ after its originator and provided for a lump sum to be divided amongst the survivors of those who had contributed after a period of say 10 to 15 years. The ‘sales psychology’ was good as the individual is normally of the opinion that he will outlive his contemporaries. Unfortunately the results were disastrous as Parliament refused to ratify the royal edict of 1653 and Mr Tonti was clapped in the Bastille.

This paper was originally written as a Note for the Institute of Actuaries Students' Society on ‘N.C.D. Systems in Motor Insurance’. This topic was one of nineteen non-life topics on which Notes were requested by the Students' Society in 1973, a different member of the Society being responsible for each topic. The Notes were not expected to give the results of research work along previously unexplored lines. Rather, they were intended as a survey of existing knowledge in each subject—including references to any useful literature—which could be understood by and be of general interest to members of the profession who had little or no experience of non-life work.

Following a request from the Manchester Actuarial Society, it was decided to revise and expand the original Note to make a paper more suited for discussion. No Claim Discount (N.C.D.) is one of the more controversial areas of motor insurance, being a topic on which the motorist is liable to hold strong and emotive views from time to time. As now written the paper takes a critical look at N.C.D. systems, as well as outlining their basic features.

1.1. Historically, as today, the Danish insurance community has been subjected to a far greater degree of official supervision than their U.K. colleagues are accustomed to. Insurance can only be written if the Forsikringsraad (Insurance Supervisory Board) recommends that the applicant office be granted a concession to do so. In particular, the Forsikringsraad will have to be satisfied that the office's premium rates are adequate. At a time when the U.K. is moving towards closer supervision, it is particularly interesting and instructive to examine a functioning supervisory system. (Section 6 of the present paper deals with this aspect of insurance in Denmark.)