bluuebunny/crossref_metadata_2025 huggingface dataset:
The Scottish Kayaks and the ‘Finn-men’
Authors: Whitaker Ian
Published: August 2016

Among the more obscure aspects of polar research the problem of the appearance off Scotland of kayaks of Eskimo type is one of the most formidable. A These craft, one of which has certainly survived, normally become waterlogged after about forty-eight hours in the water. How then were they brought to the British Isles, and by whom?

Apparently the earliest reference to their appearance off the Scottish coast is that of the Rev. James Wallace, Minister of Kirkwall, Orkney, who wrote about 1688 in his Description of the Isles of Orkney:

‘Sometime about this Country are seen these Men which are called Finnmen; In the year 1682 one was seen sometime sailing, sometime Rowing up and down in his little Boat at the south end of the Isle of Eda, most of the people of the Isle flocked to see him, and when they adventured to put out a Boat with men to see if they could apprehend him, he presently fled away most swiftly: And in the year 1684, another was seen from Westra, and for a while after they got few or no Fishes; for they have this Remark here, that these Finnmen drive away the fishes from the place to which they come.

‘These Finnmen seem to be some of these people that dwell about the Fretum Davis [Davis Straits].… One of their Boats sent from Orkney to Edinburgh is to be seen in the Physitians hall, with the Oar and the Dart he makes use of for killing Fish’.
The Date of the Linear B Tablets frome Knossos
Authors: Hood Sinclair
Published: August 2016

In an article in the Observer for 3 July, and again in the Listener for 27 October, 1960, Professor L. R. Palmer argues that the Linear B inscribed clay tablets found at Knossos date not from the end of the I 5th century B.C. but from a time some two hundred years or so later. These tablets according to the excavator of Knossos, Sir Arthur Evans, belonged to the age of what he called the ‘Last Palace’, destroyed about 1400 B.C. But after the destruction of the ‘Last Palace’ the site was not abandoned ; it was reoccupied and inhabited for another hundred years or so. Evans thought that this re-occupation was due to ‘squatters’ who had made dwellings for themselves among the ruins of the old palace. But the character of what Evans found dating from this ‘Re-occupation period’ (as he called it) fits better in some ways with the idea of a restored palace than with that of an occupation by ‘squatters’. Evans himself was not unaware of this, and once at least hinted at the possibility of a palatial reoccupation, although he subsequently veered away from the idea. In the domestic quarter of the palace he noted ‘signs of attempts at restoration on a large scale (i.e. after the destruction of the “Last Palace”) which make it probable that dynasts of the old stock still maintained a diminished state on the palace site.’ It is therefore possible that Professor Palmer is right in believing that there was another palace on the site of the earlier Palaces at Knossos during the ‘Re-occupation period’ of the 14th and 13th centuries B.C. But of this latest palace, if palace it was, owing to erosion and stone-plundering through the centuries, comparatively little had survived when Evans began to excavate. It was in any case almost certainly poor and mean compared with the other great palaces which had preceded it on the site. This was indeed a time, the 14th and 13th centuries B.C., of general impoverishment and decline throughout the civilized world including Egypt and the Near East.
Air Reconnaissance in Northern France
Authors: St Joseph J. K.
Published: August 2016

During the last two decades discoveries of buried features of archaeological and historical interest have been widespread in south-east England, on many different soils supporting varying vegetation, the gravel terraces of the principal rivers and the chalk country yielding most information. Not the least productive area is the Isle of Thanet, where such ground as is free from the spreading housing estates of coastal resorts displays, for example, groups of ring-ditches of Bronze Age barrows, enclosures of the Iron Age, Roman villae, and even practice-trenches of the 1914-18 war. If discoveries of such variety and number could be made in Thanet, what of the other side of the Channel, where extensive tracts of chalk country are crossed by valleys with wide plains of alluvial gravel? Occasional discoveries made by members of French flying-clubs, for example, by M. Roger Agache in the Somme valley, had by 1961 shown that ‘crop-marks’ were to be seen; indeed it would be very surprising if they were not.

But to undertake abroad a programme of air photography involving widely ranging flights, planned for research, is not quite so simple a matter as in Britain. Maintenance requirements appropriate to aircraft operating abroad impose limitations on the work, while above all there is need to obtain permission for such photography from the responsible authorities. It was largely owing to the continued support of M. Seyrig and Professor Will that such permission was granted at all, and grateful thanks are due to them, to the Direction de l’Architecture of the French Ministry of State, under whose auspices the work was carried out, and to the British Academy, which made a grant towards the cost of the operation.
New Issues and Some Practical Problems Involved
Authors: Chase H. P.
Published: August 2016

The issues that are of chief interest to Insurance Companies as investors are the loans raised by Foreign and Colonial Governments and Municipalities, principally in the form of bonds, and Foreign and Home Corporations in the form of bonds, debenture stocks, ordinary stocks, &c. When these borrowers want money—and they have apparently much needed it during the past three years and are needing it now—they set about the attainment of their desires by calling in the help of their financial agents or advisers who may be either a financial house or a bank. The usual methods in this country are for the Issuing House to buy up the loan at an agreed figure and subsequently to issue the loan at their own price, making what profit they can, or to act merely as agents for the borrower, charging a commission for their work and the advice they give.
The Graduation of the Annuity Experience 1900–1920
Authors: Elderton W. Palin
Published: August 2016

Probably all of you have played cricket and football, and if I were to say that you could learn those games by reading about them in books you would laugh me to scorn. The furthest you would go would be to admit that having played a game to some extent you might get useful hints from books or conversation. Some of you might even feel that in a few cases the hints do as much harm as good by tending to reduce originality which, after all, counts for a good deal in any game, and by introducing an element of surprise may in games, as in war, win when a stereotyped method is doomed to failure. It is a steep descent from these high altitudes to the subject we are discussing tonight, but I suggest that what is true of games is also true, to a large extent, of graduation. You will never learn how to graduate by reading about it. Take an experience, that is, the exposed to risk and the deaths (or the week's sickness or whatever the subject implies) or the rates of mortality, and see what they look like and appreciate the hideous unevenness and spend time in trying out of your own head to ‘make the rough places smooth,’ and after that begin your reading.
The Inclusion in Life Contracts of Sickness and Accident Benefits
Authors: Butt L. M.
Published: August 2016

The subject of Disability and Sickness benefits in conjunction with Life Assurance is of recent growth. The only occasions when the Members of the Institute have had the matter before them appears to have been in 1911 when a paper was read by W. C. Fielder before this Society, and in 1924 when a discussion took place at one of the General Meetings of the Institute.

The immense strides that have been made in America in the last five years, and the latent interest aroused in this country, as reflected by the amount which has been written in Insurance publications will, I hope, justify a discussion of the subject once more.

It will not be out of place to quote the following from a recent number of The Review:

“The attitude of British Actuaries on this question (Sickness and Disability benefits) is perhaps best described as one of neutrality. Were circumstances to force them to a decision for, or against, it would seem probable that many would be antagonistic. In the meantime, so long as they are not forced into open hostility they are prepared to ignore the business as much as possible. This is, of course, no more than an impression gathered from conversations here and there, and odds and ends of information that have come to hand from time to time. We imagine, however, that it comes fairly near to being an accurate statement of the case. If that be so then we can but regret it. The value of Disability Insurance to the public is so great, the amount of suffering it could eliminate so large that were Actuaries busily engaged in searching for the means of making it universally available the middle classes might look to the future with greater confidence.”
Reversions in Theory and Practice
Authors: Read E. K.
Published: August 2016

Although the title of this paper is “Reversions in Theory and Practice,” the greater part of these remarks will deal with the practical side, as it is essentially a practical subject. Those who deal with reversions will at once agree with the necessity for practical experience, a little of which is worth a great deal of theory. Mr Collins concludes his lectures on reversions with the advice, “Do not flummox yourself with formulae till you can't see the wood for the trees,” but I think that that admirable warning would really form a better preface. A glance through the writings on our subject will reveal at once a lack of complicated formulae. An absolute reversion is valued simply by the appropriate “A” factor and for a contingent reversion, there is merely deducted from the “A,” the cost of providing against whatever contingencies may be involved. Before one gets to that point, however, other considerations are necessary.
Life Reassurance
Authors: Clough W. H.
Published: August 2016

An office transacting life assurance relies for its results on the law of averages as revealed by investigation into past experience. Statistics are compiled in order that an estimate of future mortality may be obtained, and i f each assurance accepted were for the same amount, the office could, if it wished, retain for its own account all its business. In practice proposals are received for amounts ranging from the smallest sum for which the company will issue a policy up to hundreds of thousands of pounds, and clearly as the bulk of the business is for small sums assured an office might experience violent fluctuations in financial results if it retained the whole of the large proposals, even if the mortality experience were according to expectations and consistent from year to year.
New Issues
Authors: Milnes H. L.
Published: August 2016

The subject can perhaps be treated most effectively by following through the natural sequence of events, starting from the time at which some publicly constituted body of persons, such as a national government, municipal authority or company decides that it desires to borrow money.

It must be explained that I have applied the term “Borrower” both to persons borrowing money by means of bonds and to those raising capital by means of shares.

The first step is to get into touch with representatives of a financial “house” who, as specialists in such matters, will assist in the technical and other problems involved. This brings us automatically and immediately to the question of underwriting which may be denned as the process by which, for a consideration known as the underwriting commission, the requisite subscription to a new issue is guaranteed. It is the process by which the borrower virtually effects an insurance policy, under which the “insurers” or “underwriters” guarantee to subscribe for that part of the issue not applied for by the general public.
Selection of Lives
Authors: Heath E. A. J.
Published: August 2016

In dealing with the selection of lives we leave the actuarial idea of selection and come down to the practical consideration of the individual. The actuarial student is accustomed to dealing with select lives and we want to find out how these lives are classified. In this practical sense there are two types of selection, medical and non-medical, the latter referring not to a non-medical scheme of assurance but to the points arising from the papers and circumstances of the case apart from the medical report.

It is proposed to consider both these aspects and to show that the actuary can take his part in the selection just as much as the Principal Medical Officer. Some considerations need the actuary alone, others the P.M.O. alone, and the best results can only be obtained by whole-hearted co-operation between the two. No attempt is made to discuss extra risks, this being outside the scope of the paper, and we shall merely examine the various phases of the selection and outline points which the actuary must be ready to detect so that he can assist the P.M.O. as far as possible.
Notes on Extra Risks
Authors: Maltby C. H.
Published: August 2016

The object of these notes is to give a brief introduction to the treatment of proposals for life assurance which are not acceptable at ordinary rates.

In theory, the extra premium charged for a certain type of case should be based upon the abnormal mortality which is expected. Little, however, is known about the rates of mortality applicable to any class of extra risk, while in practice extra premiums involve a comparatively small amount of cash and cause much trouble, particularly to the outside staff. The imposition of extra premiums is therefore restricted as far as possible, and a tendency towards their virtual abolition would probably be much accentuated, but for fears that to do so might involve an undesirably large influx of second class business.
Bonus Reserve Valuations
Authors: Ogborn M. E.
Published: August 2016

These notes assume the reader knows the general principles on which bonus reserve valuations are made.

The essential idea is to value as a liability the amounts the office will be liable to pay as sum assured, bonus and expenses, setting of f as an asset the amounts the office will receive—the office premiums. The valuation must be based on really accurate estimates. We must use the mortality we think will prevail and the interest we think can be relied on in respect of existing business. Admittedly bonus is uncertain—a valuation of future bonus does not guarantee it—but the valuation must be as accurate as possible. The bonus allowed for will be realised if the conditions assumed prevail in future.

The table of mortality is usually a standard table to which the experience of the office may be regarded as an approximation, but need not necessarily relate to the same class of life. The essential qualification of any table for use must be that it is a real approximation to the likely future experience of the office for which it is used.
Bonus Prospects
Authors: Potter D. C. H.
Published: August 2016

A very large proportion of the life assurance policies in force in the British Isles give the assured the right to participate in the profits of the issuing office. Where a policy has been effected in recent years, it is almost certainly the case that the assured at the time of making his proposal, was given some indication of the bonuses which he might expect to be allotted to his policy. Sometimes an intending assured merely learns the latest rate of bonus declared, or the rate of interim bonus for the time being in force, by reading the prospectus of the issuing office, while on other occasions figures given verbally by an agent, or in a leaflet or letter describing the proposed policy, contain an allowance for future bonuses. It is almost invariably the case that some information along these lines is given and, no matter how guardedly it is done, the assured regards the figures which he has received as the office's estimate of the bonuses which will in due course be allotted to his policy.
The investigation of stocks and shares
Authors: Gough R. B.
Published: August 2016

These notes deal mainly with that part of the investigation of securities which involves the study of company accounts.

At the outset, it should be stressed that the figures of various companies are not computed on a common basis. In company accounts, as in an actuarial valuation, the same general principles can be modified to give varying results, with the important qualification that even the general basis does not have to be published. There is therefore plenty of scope for variations in accounting practice, and hard and fast conclusions cannot be drawn from figures alone. In this connexion, one cannot do better than quote the remarks made by Mr Arthur Chamberlain at a company meeting last year, when he said:

I do not suppose there are many of my audience who are simple enough to believe that a company's accounts, particularly those of a holding company, set forth the actual and exact profits earned in each year.… I do not think it would be too cynical to say that the ordinary shareholder is lucky if he can read from the figures of a balance sheet more than an idea of the general tendency forward or backward, unless the directors are themselves aware of it and wish him to.… It is possible within the law to present a more or less truthful but entirely misleading position of affairs.

In the present state of company law, therefore, it is of no use trying to produce complicated formulae or elaborate indices intended to indicate true share values at a glance.
A post-war plan for population statistics
Authors: Cox P. R.
Published: August 2016

The considerable public discussion of the past two years on the subject of our social insurance schemes and their post-war reconstruction has culminated in the publication of the Government's plans as a White Paper (Cmd. 6550–1). At present, social insurance in this country (now to be called National Insurance) is divided into a number of independent sections, each with its own statistical arrangements covering a large part of the population. At the same time some aspects of the whole population are regularly surveyed by the Registrars-General by means of an independent system of recording. The Government's plan greatly expands the field of insurance to cover all classes and groups. Before this unified plan can begin to function, fresh statistical machinery will have to be prepared, adequate to the task of keeping it efficiently in operation, and there will in consequence be a great opportunity for coordinating, simplifying and generally improving the national population records as a whole.
Retrospect 1939–1945
Authors: Martin D. B.
Published: August 2016

These notes are not intended to be a history of the Second World War. They are no more than a survey of the effect of that war on the financial institutions, namely, the Life Insurance Companies, with which British actuaries are particularly concerned. It is hoped that the survey will be of value to those members of the Students' Society who have been out of touch—through no fault of their own—with what has been happening in the field in which their peace-time activities mainly centre.

The Companies operate under conditions of ‘Freedom with Publicity’ in furtherance of which there was published, pre-war, the yearly volume of Assurance Companies' Returns, which, with the summaries appended to it, offered a convenient source of facts and figures. The publication of the Returns ceased during the war years, the last figures available relating to the operations of the year 1937; for most purposes, therefore, 1937 has been used as the ‘pre-war basic year’.
Approximate redemption yields.
Authors: Hastie G.
Published: August 2016

With the present high rates of income tax and low yields, redemption yields are frequently outside the range of bond value tables and even of the more accessible interest tables. The following approximate method of estimating yields has been found satisfactory in practice:

For a bond bought at 1 +kpayinggper annum half-yearly redeemable innyears at I the yieldiconvertible half-yearly can be written

whereat rate ½i.

Practical use of (i) depends upon the accuracy with which we estimateθ. Successive approximation will give a correct result, but the formula is not in a form when this method can be easily used. Successive approximation can be more easily effected by choosingθand then estimating the error.
The Practical Interest Shown in Institute Affairs by Fellows of the Institute of Actuaries. A Comparison of the Period 1920–39 with 1880–99
Authors: Fisher H. F.
Published: August 2016

The opinion is expressed sometimes that of recent years less interest has been taken by the profession generally in Sessional meetings of the Institute, and in the preparation of original contributions for theJournal. It is urged that actuarial subjects have been fully covered by earlier writers, and that in consequence a narrowing field for active interest exists.

The object of this paper is to examine the statistics available and, if possible, to decide whether the views stated above are justified. For this purpose two main ‘yard-sticks’ will be used.
An elementary introduction to the testing of statistical hypotheses
Authors: Forster C. I. K.
Published: August 2016

During the past 25 years much attention has been given by prominent statistical writers, especially J. Neyman and E. S. Pearson, to building up the theory of the Testing of Statistical Hypotheses. This theory and the practical tests which have been developed from it are of great interest to actuaries, those employed in normal actuarial spheres as well as those employed in purely statistical roles. The leading exponents of the theory, however, are mathematicians of no mean standing and the subject has been approached from a mathematical angle. From the point of view of the actuary or student whose study of mathematics has not proceeded beyond that of the Institute's examination syllabus this is unfortunate, as the consequent complexity of the approach masks from him the essential simplicity of the basic ideas underlying the theory.
Statistical estimation
Authors: Solomon L.
Published: August 2016

The rules of deductive logic are inculcated throughout our intellectual education. They are universally accepted. They provide firm standards of judgement for many aspects of academic study, research, and of our daily work. It is from some points of view perhaps a matter of regret—and from others of challenge–that their scope is not all-embracing, and that a wide range of problems, both of practical affairs and of intellectual inquiry, is beyond their jurisdiction. These problems, of which the subject-matter of this essay is one, involve the process known as induction, or inductive logic. Rules, standards of judgement, do exist in this field, but few have won universal acceptance and many are the subject of vigorous philosophical dispute.
The application of the Service-Table technique to staffing problems
Authors: Jones E.
Published: August 2016

The simplicity of L. Solomon's solution to the manpower problem discussed in the preceding article is due partly to the use of compound interest functions but mainly to the fact that transfers to semi-skilled status and thence to the skilled classification each occur at a single point, after two and five years respectively, from entry. When dealing with the corresponding problems of, say, office staffs who are recruited upon leaving school or university and may serve until age 60 or 65 the conditions are very different. Transfers from one category to another, in this case promotions from grade to grade, generally occur at varying rates over a range of ages. Further, the work cannot be simplified by the use of compound interest functions, the full service-table technique must be employed.
Valuation for Estate Duty purposes of an estate subject to an annuity.
Authors: Joseph A. W.
Published: August 2016

A Few years ago two estate duty valuations were made in somewhat unusual circumstances.

A bequeathed an annuity of £75 equally amongst his five daughters, expressed to be payable for their joint lives, the whole of the annuity being subject to remainder to the survivors or survivor for lives or life. The annuity was charged on a leasehold property which was bequeathed absolutely to B, the son of A, subject to the joint-life annuity.

One of the daughters died, and for the purposes of estate duty it was necessary to know the present value of the proportion of annuity which passed on her death, i.e. the value of the annual sum of £15 payable until the last survivor of four lives aged respectively 81, 78, 77 and 71.
Mathematics and the actuary
Authors: Vajda S.
Published: August 2016

The relation between actuarial and scientific matters has frequently been investigated and there are various ways of looking at their interconnexions. We can ask, among other questions, whether our activities as actuaries entitle us to consider ourselves to be scientists in any sense of the word. This is the context in which the question has been debated in the Students' Society (cf. ‘Are we Scientists?’ by W. G. Bailey & H. W. Haycocks,J.S.S.Vol. VI, p. 93). The feeling on that occasion was that the answer must be in the negative, but even if our everyday activities are not strictly scientific it could still be claimed that there exists a set of correlated topics to be called ‘actuarial science’ which is at the actuary's disposal and which is kept alive by contributions of individual actuaries.

German scholars have asserted the existence of a ‘Science of Assurance’ which, according to them, comprises and combines into an organic whole those portions of all other sciences which have some bearing on (not necessarily Life-) Assurance. We are, in this country, less prone to create abstract notions by definition, but even if we do not see any merit in ascribing a scientific status to our profession, we can ask whether there exist branches of science which have something to offer to us in our capacity as actuaries. It will be agreed that two sciences in the wider sense of the word are in some way connected with our work, viz. Economics and Mathematics. Our profession can claim historic connexions with both and members of our community have proved themselves competent in them. Should we encourage, and even extend, this connexion?
The nomographic estimation of the influence of substandard mortality on the policy value.
Authors: Wünsche G.
Published: August 2016

In this article we are concerned with the problem of interpreting numerically the relative variations which the policy value based on a standard mortality table undergoes when this table is replaced by one which allows for 100T% extra mortality.

This question is of particular interest from two points of view. First, it is of consequence for the technique of insurance of abnormal risks to obtain some idea of the numerical effect of percentage additions to the mortality on such important lifecontingency functions as surrender values. Further, in the treatment of this question as a typical approximation problem of lifecontingency mathematics, it appears that the solution most suited to the essence of the inquiry and for practical applications is obtained by a nomographic evaluation of the quantities under consideration. As regards the importance of nomography in the practical application of insurance mathematics the author has already made a thorough exposition and given examples in a series of earlier publications; in future, in life-contingency problems, the necessary consideration will always be given to the development of the appropriate nomographic methods, particularly in connexion with the introduction of typical approximate methods.
British life assurance overseas
Authors: Sharp C. D.
Published: August 2016

At a time when attention is focused upon our foreign trade and when there is widespread recognition of the need to pay with goods and with services for the food and raw materials we are compelled to obtain abroad, there is much to be said for an appraisal of the overseas activities of British life assurance companies and for a discussion of the major problems calling for immediate attention. The subject was last dealt with in a paper read before the Institute by Mr W. F. Gardner in 1935, but the intervening years have been not uneventful, and today the accent is somewhat changed, although it will be found that the previous paper deals with many of the problems confronting us now.
Initial expense allowances in a net premium valuation.
Authors: Musk A. S.
Published: August 2016

The subject of making an allowance for initial expenses in a net premium valuation is one which has long interested actuaries, and it is usually associated with the name of Zillmer who first wrote an article on it in 1863. The following note, based on practical experience of valuing a young and rapidly growing life fund, may be of interest to students.

The normal method of making such an allowance is, in effect, to adjust the net premium used in the valuation by the equivalent of the initial expense allowance spread over the whole duration of the policy.
The effect on pension fund contributions of a change in the rate of interest
Authors: Bizley M. T. L.
Published: August 2016

The object of this note is to suggest a method, believed by the writer to be new, whereby once a pension fund contribution has been calculated the revised contribution occasioned by a small change in the rate of interest can be approximately determined with great ease and rapidity.

Let 100cxbe the percentage contribution for entry agexrequired to support a pension per annum equal to 100k% of pensionable salary for each year of service. Assume for simplicity that normal retirements and early retirements (if any) can together be sufficiently allowed for by the use of a single average retirement age (M).
A note on the variance-ratio distribution
Authors: Bizley M. T. L.
Published: August 2016

In his paper (J.S.S.Vol. VI, p. 172) Dr Wishart showed that the variance-ratio test can be very easily used with the aid of the appropriate tables. It may not have been obvious to the reader of that paper that, unlike most distribution functions, the one in question can be evaluated by elementary methods and that a simple formula can be established to give the required probability independently of any table. It is not suggested that the use of the formula to be demonstrated in this note is preferable to the ordinary employment of tables. It may be remarked, however, that in certain cases where a probability has to be directly calculated the formula has a big advantage, since the tables give only the values of F (orz) corresponding to a few specific ‘probability points’ and interpolation between these must be very unsatisfactory, as is obvious from a glance at Table 3 of Dr Wishart's paper.
Notes on points arising during the currency of transactions in reversions and life interests.
Authors: Benz N.
Published: August 2016

The purpose of this paper is to indicate some of the points which arise during the currency of transactions in reversions and life interests; the selections of appropriate bases for mortality, interest, valuation of funds and estate duties do not fall within the scope of the paper. References to strictly legal aspects are no more than incidental.

As in many other matters with which actuaries are concerned, mistakes (including errors of judgment) sometimes only become apparent many years after they were made. It follows, therefore, that no hard and fast distinctions can be drawn between the preliminaries necessary to a transaction and what comes after. For this reason I feel obliged to refer to my earlier paper entitled ‘Notes on transacting new business in reversions and life interests’ which appeared in thisJournal(10, 1); it is hoped, however, that the present paper will be found to be complete in itself.
Discount houses and the short-term money market.
Authors: Mills L. G.
Published: August 2016

Since my own experience of the cycle of monetary operations I shall describe is concerned with banking, it would seem natural to commence by discussing the functions of a bank. There is no legal definition of a bank, but the term is generally understood to apply to an institution which accepts from depositors money withdrawable on demand, in practice generally by cheque. The cardinal point to bear in mind is that a bank is a trustee of other people's money which, apart from deposit accounts at 14 days' notice, is all repayable on demand. The fundamental consideration is that it iscustomers'money, apart, of course, from the comparatively small proportion of resources represented by shareholders' capital.

A bank's first duty, therefore, is to its depositors (not to its borrowers!), and the exercise of that trust requires that any depositor shall be free to come to his bank and withdraw all or part of the funds he has entrusted to it. Hence liquidity is of prime importance and a bank must arrange its structure of assets so as to comply with this requirement. But like other commercial concerns a bank must have earning power to cover its outgoings, reward its shareholders and try to satisfy its staff! So, consistent with liquidity, a bank's ‘quick’ assets are arranged to bring in as large a return as possible subject to this overriding limitation.
Population projections: Notes on the choice of bases
Authors: Cox P. R.
Published: August 2016

Any discussion of mortality, fertility or migration assumptions for population projections, or of the various technical questions that arise, must be preceded by some consideration of the nature and purpose of the work that has been undertaken. It should be asked why such calculations are necessary and what is expected from the results. Fundamentally, inquiry about the future of the population arises from a natural curiosity about man's surroundings in space and in time, and this does not seem to have been damped by past failures to foresee developments; otherwise, long-range projections would by now have ceased to be made, in view of the poor prospects of success. Beyond this, however, there are to-day a variety of practical reasons for which it is deemed necessary to estimate the future numbers of persons in given areas with such accuracy as is possible.
Small private pension funds
Authors: Merriman P. E.
Published: August 2016

An important factor in any actuarial problem is the number of lives likely to be involved. It is at first surprising therefore that so little attention is paid to the question of size in our pension fund literature, although a brief consideration of the historical development of pension funds gives some indication of the reason for this situation.

Superannuation provisions were originally introduced for the benefit of employees of the Government in the Civil Service and the Armed Forces. The pensions were allowed to emerge as charges on current revenues and no attempt was made to fund the liabilities. Towards the turn of the last century superannuation provisions were introduced for teachers (consequent upon the Education Act, 1870) and railway staffs, and for the staffs of certain municipalities. The movement grew slowly, although several large firms began to make pension arrangements at this period, and among non-government employers there was a greater tendency to fund the liability for pensions.
Tax and estate duty problems in respect of policies on the lives of employees and directors
Authors: Jaggers C. L.
Published: August 2016

These notes are an attempt to answer a question which is often asked and might at first sight appear to be a simple one, viz. ‘What is the tax and estate duty position where a company effects an assurance on the life of an employee (or director) and what would be the position were the man to take out the policy himself, the company providing the premiums?’ The first point to settle is— ‘What is the purpose of the policy?’—and then, related to that, ‘What class of assurance is intended?’ Besides the tax and estate duty aspects there is the question of the respective rights in the disposal of the policy proceeds which may in some cases over-ride the financial considerations.

Where alternative procedures are available the relative financial effect can, in some instances, only be assessed by someone with an intimate knowledge of the accounts of the company and the affairs of the life to be assured. It is desirable in any case that the inquiries should be dealt with through the company's accountant. It might well be asked whether such matters are not entirely the province of the professional accountant. Whatever opinion may be held about this, the fact remains that life offices are to an increasing extent consulted on technical matters involving taxation and estate duty even by members of the legal and accountancy professions.
Actuarial note on Duhamel's Integral.
Authors: Grossman Eli A.
Published: August 2016

In this note, we consider a problem and its implication. The problem is the control of the flow of new business in a portfolio in a certain type of policy. Supposing we know in advance what the investment implications of a certain trend of reserves will be so that we can decide a programme of development of the fund purely from investment consideration. If the flow of new business is ‘controllable’, e.g. by the amount of advertising, commission, and reward to the selling staff allowed from time to time, what volume of new business is required in order to build up to a predetermined reserve pattern? In solving this problem, we will use a mathematical integral employed in electricity, physics, chemistry and other fields. This is so fundamental in other fields that perhaps it will solve many more of our problems.

In this note, emphasis is given to the amount of insurance in force because that is customarily done in the United States.
The Calculation of Premiums for Profit-Sharing Group Death Benefit Policies.
Authors: Green P. J. H.
Published: August 2016

The type of contract which will be considered is a renewable oneyear term assurance on a group of lives which provides, in addition to a capital sum on the death of any life, that if at the end of the year the total claims in the year are less than some fraction,k, of the premiums paid, then a fraction,l, of the difference will be refunded.

Suppose thatPis the net andP′the office premium fornlives assured for a sum of 1 each and thatq(r)is the probability that exactlyrdeaths will occur during the year, then

,

wherecis the integral part ofkP′. Sinceequals the expected deaths,μsay, the equation may be written

,

whereand.
A Life Interest Formula
Authors: Wallas G. E.
Published: August 2016

Lidstone has shown that the solution to the theoretical problem of valuing a life interest is essentially indeterminate. For a uniform life interest this is generally avoided by requiring of the formula that at the end of any policy-year the purchaser will have received sufficient income to discharge all premiums to date on the supporting policy, and to provide the predetermined interest on his total outlay.

Consider a life interest to be valued of 1 per annum, and letPbe the office rate of premium on the whole-life non-profit policy required to return to the purchaser his initial outlay. In the evolution of a formula three unknown quantities are involved:

G, the gross purchase price (including expenses);

T, the total initial outlay;

S, the sum assured.
A Further Table of Binomial Coefficients.
Authors: Bizley M. T. L.
Published: August 2016

A table of for m = 1 (1) 20 and t = 1 (1) m was supplied by the writer in J.S.S. x (facing p. 64). The present table gives values of for m = 21 (1) 52 and t = 1 (1) n, where n = ½m if m is even, or ½(m — 1) if m is odd. By virtue of the identity I , it is unnecessary to tabulate the argument for higher values of t.

The table was constructed by means of the relation

,

and each column was checked by casting and using the relation

.
A Discussion of Economic and Stock Market Trends, and an Approach to Forecasting.
Authors: Jenkins P. T.
Published: August 2016

The aim of this paper is to illustrate in some detail a practical approach to the process of forming a judgment of the investment scene as it is likely to be presented to the U.K. investor. It falls into four parts, namely:

1. Theoretical base.

2. Survey of type of variations in stock markets and the factors affecting them.

3. Methods of diagnosing trends.

4. An approach to forecasting.

The last part occupies only a small proportion of the space since the formation of a judgment in investment work, as in most other fields, is only ‘10% inspiration’.
The Future Progress of a Fund—Approximate Forecasts
Authors: Francis P. R.
Published: August 2016

The technique described by Miss Merriman in the preceding note can be applied, with suitable alterations, to many different types of life assurance and annuity funds as well as to pension funds. By the use of approximate methods it is possible to abbreviate the working within a comparatively small compass, whilst retaining sufficient accuracy to afford a guide for investment policy. This note describes a particular application of these methods.

The Management Committee of a large Widows' and Orphans' Fund sought the Actuary's advice on the probable future progress of the Fund. The Fund was established many years ago, but the membership has been expanding and both contributions and benefits have been increased from time to time. It was clear on general grounds that, if sufficient new entrants were admitted to maintain the present membership without limit of time, financial maturity would not be reached for many years. On these assumptions the Fund would eventually reach stability, but it would never decrease, so that from this point of view irredeemable investments could be purchased in the belief that they would never have to be sold. The adoption of this theory, however, would be tantamount to making the future surplus or deficiency of the Fund in some way contingent upon the future flow of new entrants.
A Method of Estimating the Effect of a Change in a Set of Decremental Rates
Authors: Bizley M. T. L.
Published: August 2016

Three of the writer's earlier notes in thisJournal(see References) have discussed respectively the effect, upon pension fund contribution rates, of changes in the salary scale, the rate of interest and the entry age, and approximate methods have been supplied for estimating rapidly the effects of the two last-mentioned changes. The object of the present note is to propose a method for estimating the effect on the survivorship ratioly/lxaccording to a service table, of changing one of the sets of decremental rates in the same proportion at all ages, or of removing a set altogether, or of introducing a new set in addition to those already present. For example, given a service table based on certain rates of mortality and withdrawal, we shall be able to estimate, with a negligible amount of arithmetical work, the new values of such ratios asl60/l25resulting from removing the mortality rates altogether, from doubling or halving the withdrawal rates or from introducing a new set of decremental rates.
Group Life Assurance.
Authors: Armitage P. B.
Published: August 2016

The text book,The Practice of Life Assurance, by Coe and Ogborn, pp. 367–9, and the references there to other literature, give a brief summary of the subject of group life assurance; this paper attempts to bring out in more detail a little of the practice (of some U.K. offices) and some of the special problems that belong to the subject, for the benefit of students who have no practical experience of it. There is no dearth of literature on pension schemes, with which group life contracts are very often linked, so that reference to pension schemes in this paper, though necessary, will be brief.
Three R's of Insurance—Risk, Retention and Reinsurance.
Authors: Beard R. E.
Published: August 2016

Just over four years ago I had the pleasure of presenting a paper to the Students' Society on some aspects of non-life insurance (J.S.S.13, 139) and I would first like to thank the Society for again giving me an opportunity of putting on paper some further ideas which have largely flowed from my interests in the non-life field. Frankly this paper is of an exploratory nature and suffers from all the defects of reporting continuing experimental work. I hope therefore that the many obvious loose ends will be viewed in this light and that members will be able to sense the excitement of this relatively undeveloped field.

The purpose of this paper is not to provide a guide through the various papers that have appeared relating to the three related topics of retention, reinsurance and risk but rather to provide an elementary approach to these problems with the object of stimulating interest in some aspects of actuarial practice which are largely regarded as lying in the realm of ‘experience judgment’ but which are capable of precise formulation against a background of mathematical statistics.
The Finance Act 1956 and the switching of Pension Schemes
Authors: Macharg J. M.
Published: August 2016

The word ‘switch’ has come to be used to describe a variety of operations in connexion with pension schemes. A scheme may be ‘switched’ from one life office to another; a scheme may be ‘switched’ from without-profits to with-profits; or the two operations may be combined. This paper attempts to deal, however, with an operation which is the direct result of the Finance Act 1956—the switching of a scheme approved under Section 388(1) of the Income Tax Act 1952 to a scheme approved under Section 379 of the same Act—and it is assumed that the operation takes place within the one life office.

The operation in question has its origin in the somewhat detached view of life taken by our legislators and by the administrators whose duty it is to advise them.
Stock Exchange Options.
Authors: Day J. G.
Published: August 2016

The best known and most common type of option is that where an investor pays money (option money) for the call—that is for the right to buy shares at the current price in 3 months time.

This is best explained by an example. Suppose shareAstands at 50s. (market price 49s. 10½d.–50s. 1½d.) and the option rate is 4s.

Then the investor pays:

Option money 4s.

Commission (as for buying a share at 50s. 1½d.)

This payment gives him the right to buy the share at the ‘striking price’ on any ‘declaration day’ within the term of the option.
Options in Life Assurance
Authors: Souness J. M.
Published: August 2016

When one considers the variety of ‘options’ available to policyholders and the large number of lives assured who are in a position to exercise an option, one might be haunted by a vision of legions of operators speculating on the optimum moment at which to make a deliberate choice advantageous to themselves and detrimental to the financial stability of life offices. The fact that offices are prepared to encourage various types of options clearly indicates one of two things, either (a) that the skill of the operators is not held in high esteem, or (b) that the skill of the offices is high enough to overcome intelligent selection by the option-holders. If it were true that the value of any particular option could be accurately stated by a mathematical expression and if the incidence of the exercising of the option were established to universal satisfaction, (b) would be mercifully true. This condition, however, does not hold for many options, and it is this element of the unknown which gives spice to the subject and justification for further comments.