Papers and reports

The object of this paper is to continue the discussion on the valuation and bonus problems of a life that was recommenced in the recent papers by A. T. Haynes and R. J. Kirton (T.F.A. 31) and by F. M. Redington (J.I.A. 78). Both of these papers were concerned, inter alia, with the principle of matching assets to liabilities or, in Redington’s graphic phrase, of immunizing the life fund against the effects of a change in the general level of interest rates.

The purpose of this paper is to provide a basis for a discussion on the treatment of proposals for life assurance on sub-standard lives. To assist in this discussion a body of mortality data in respect of the sub-standard lives of a particular office is presented. The data relate to ordinary life assurances issued in this country subject to a diminishing lien. In the light of these data certain suggestions are made regarding the relative financial importance of the extra mortality of impaired lives in modem conditions.

Although this paper deals with the application of mathematical formulae to mortality data, it is not concerned with ‘graduation’ if that word is held to imply the fitting of a particular curve to a particular experience with the object of satisfying statistical tests. Nor is the paper concerned with the development of any philosophical theory of mortality. The experiments which it describes were undertaken in the hope of finding a standard type of curve which would give a good over-all representation of adult mortality in general.