In it, Richard Price introduces a number of key ideas:
- valuation of life policies
- mortality experience of policyholders
- how the calculations should be made and the results used to ascertain the financial position of the society.
'Observations on the Proper Method of Keeping the Accounts, and Determining from Year to Year the State of the Society for Equitable Assurances on Lives & Survivorships’ (1774) is addressed to the Society’s directors and develops methods for investigating the financial state of the Society. At this period the Society had no idea of whether it was making a profit or loss.
The first part of the report derives some approximate “rule of thumb” methods, including a comparison of actual and expected mortality. The latter part sets out:
- the method by which the data should be tabulated for each year of the period over which the investigation is to be made
- a recommendation that the present value of each policy in force at the valuation date should be calculated by subtracting the present value of future premiums from the present value of the sum assured (using methods developed by Thomas Simpson, with corrections from Price’s own treatise). Price says he is aware that the computations will take up much time, but it is a work of particular importance. If done once, it will not be difficult to do subsequently, and it will not be necessary to repeat it every year.
‘Observations on the proper method’ states that the surplus at the valuation date can be calculated by taking the total value of all the policies in force, calculated as above, and subtracting this total from the Society’s ‘stock’, i.e. the (market) value of the assets
In addition the report gives an approximate method for analysing the profit or loss that has arisen in each year. Subject to further investigation, it appears from a cursory glance at the early valuations in the Society’s archives, that the tabulation and valuation methods shown were actually adopted in practice.
Richard Price’s report is discussed briefly by M E Ogborn, Equitable Assurances (1962), pages 103-104. He concludes: ‘Richard Price’s observations were the first to show how the business of a life office should be arranged and valued.’ The report does not appear to be in Price’s normal handwriting that he used for letters, so it may be a contemporary copy prepared for one of the directors. Ogborn says that the report was considered by the directors when they met at the President’s home on 27 January 1775.
- 31 December 1962
- 31 December 1964
- 2 April 2007
For any library enquiries please contact:
We try to respond to email queries within one working day. Researcher access to historical resources may require notice in advance of visit in order to retrieve items from storage.
Filter or search events
Delivered by the IFRS 17 Contractual Service Margin working party.
The Certified Actuarial Analyst (CAA) qualification has rapidly established itself as adding real value, to insurers and consultancies, and to the clients of consultancies, around the World. CAAs work alongside actuaries and actuarial students, as well as other financial services professionals, in an increasingly broad range of roles and fields.
This session is a repeat of the one earlier today at 09:30
Many individuals and institutions have a long-term focus, and invest funds for the benefit of future generations. Their strategy should reflect their long horizon. University endowments are one of the oldest classes of institutional investor, and I will present the first study of the management of these endowments over the very long term.
This year's GIRO has been re-designed as a virtual conference to offer members and non-members the opportunity to get up to date content from leading experts in the general insurance field via online webinars. All sessions will be recorded and made available to purchase and re-watch post-event on the IFoA's GI Online Learning Resource area.
This year's Life Conference has been re-designed as a virtual conference to offer members and non-members the opportunity to get up to date content from leading experts in the life insurance field via online webinars. All sessions will be recorded and made available to purchase and re-watch post-event on the IFoA's website.
This webinar will provide an update on the emerging thinking around future regulation of DB schemes:
The webinar will discuss the challenges and opportunities schemes face in evaluating end game options, choosing a target state and understanding the impact this strategic decision could have on member outcomes long after the “end state” is reached. Adolfo, Kevin and Rhian bring over 60 years of experience in the industry and a variety of perspectives as scheme actuary, covenant adviser, trustee, de-risking adviser and insurer.
Cash-flow driven investing is a game-changer for DB pension funds navigating their end-game. Suitable for sponsors who want to reduce risks on their balance sheets. And for trustees, it shifts the focus to providing greater certainty of returns, managing funding level volatility and ensuring they have enough income to pay cash-flow requirements.
Patrick Kennedy, Partner at Gateley Legal and Founding Director of Entrust (a leading professional pensions trustee company), will be delivering an update on the latest legal developments during the course of 2020. With both a pensions legal perspective and over 25 years of trustee service, Patrick will seek to highlight how the letter of the law has continued to evolve against the backdrop of a difficult and challenging year
The talk will provide an understanding of the priorities and relationships between deficit reduction contributions, in the context of wider scheme funding, and different types of value outflow from the employer based on the working party’s recently published report.