Worcester daily spy. [volume] (Worcester [Mass.]) 1850-1888, 1859-12-02


the Great Exhibition, when had the honor to deliver
an address to the meeting of distinguished Actuaries
prominently on this subject but the following extract
from PIP tx and K of the Sd edition of Cont Wit Stat
pub 1851 will show the of the objections urged
by me against the adoption of such table
There likewise the table usually denominated the
Experience Table, deduced from the observa-
tions of fifteen Life Offices In addition those of the
Equitable and Amicable Societies already mentioned
ported on by the committee of Actuaries appointed in
the year 1882 In these observations like those deduced
from the Amcable and Equitable Life Offices the prnci-
pal portion of the data has reference years
against the results gVenin the Experience Table. From
the ndsposition evinced by the contributing offices
let their Individual experience be known, the
members of the committee to whom the inquiry in
trusted it became necessary that different schedules
given with blank headings, and completely mixed up
together that it was impossible uterward to determine
from what Office any particular schedule came.
rms Arrangement prevented the Investigation being
any other than one confined to policies issued by those
onces ana not an estimate of the mortality among
certain number of lives
TO those, therefore, of even limited experience, it
must be obvious that the thereby deprived
all value as Indicating the rate of mortality among the
Nothing is more notorious than the frequency with
which the life is assured in duplicate and trplcate
ot only III he same ofhce but in several Offices and it
OFTEN happens that on the same life there has at
policies in the different offices conformity take an ex
IRENE example, in order to show the nature of the prn
edrom calculation founded upon the number of policies
ana not upon the number lives it's well known in most
was so FULLY assured in the Life Offices of this kingdom
was impossible to obtain any further policies his
life from Assurance Companies and it has been said that
had Lloyds have the lire under written
has considered could not be less than three or four
hundred II is hence evident that death taking place u
der such circumstances would in the result of such in
quy appear as three four hundred deaths, while in
fact only one had happened.
I'm like manner, the fact of the life still surviving
would produce the same anomalous result of their being
these policies without any recorded death.
Ut therefore clear that unless the principle repeat
ed policies ON the same life uniform numbers
and very generally characteristic of all the
eheced that compensation could not be expected
approximation to the truth
so far therefore, we are yet without satisfactory
try which can be relied indicating the rate of
ttIIy among Inc assured classes In recent years
Whatever, therefore, may be the views of the commits
9nsT s respect to the practical Applicability Of the ia
not based on observations on human fe the principle
onwlch 1t constructed regards the data is entire
~ fallacous, and ii relied on, might lead
disastrous results than did Dr. Prices hypothesis in his
have given prominence to this part of the question:
not simply on its own account but because it the first
OF series of assumptions which throughout the
whole Of the commissioners report in which they refuse
to deal with real facts aid substitute for them hy
pothetcal and fictitious inventions.
Inc next portion of the report to which beg to direct
The figures in the last column do not represent any
liability which has real existence; in fact they do
not represent the value of the liability under the poll
ces and as shall presently prove they do not represent
are purely fabrication, and therefore undermine all the
subsequent observations and remarks OF the Commission
eTswhch rest wholly on the fanci:u figures which form
inc last column OF those at the top of page This
would have been apparent to any ordinary calculator,
culaons rest and also the calculations themselves
What can be the reason of the Commissioners giving,
Ill the table at the top of t. the amount assured, and
NOT also the amount of premiums payable in connection
with these assurances? shall attempt explana-
ton, but simply state, that this information been
furnished and also the of the assured, schoolboy
they have given in the column referred On the first
perusa of the report forcbly struck by the svs
temac care with which in every case some element or
other of their calculations withheld rendering it i'm
possible for any one having only the data in the report
itself at command to check the results.
From the means and data placed at disposal to
make the valuation to which shall hereafter advert
so and shall duplicate the calculation of the commits
any competent person may judge r himself This viii
be done for those risks included in the first line of the
table at the top of of the commissioners report
and which represent So per cent of all the assurances
ture results given by the commissioners the same
rate of mortality is taken that protested TO be employ
ed by then and the of interest viz per cent
1t will be seen that the number of policies is 1852 the
amount assured e2O6336 and the amount OF annual pre-
h Ia ms payaole IN regard to them, tTi,lI6,SlI
II thus appears that the present value of the sums as
And the present value of the future premiums
payable in respect to the same is 9O3,S9l 50
Difference liability under the policies 1896 ~
In the calculations of which the preceding the
cudes 1862 policies or "A more than enter into the com
a esS da whiem aerfhce e eSmy
Der last and the preceding to the Both OF the same month";
of the liability under them very much less than the
estimate in the commissioners report
Ihe 5 Commissioners 65 a. estimate see page qoo q,
The preceding calculations give 996 70
Difference, 9.893I p
Hence, that the commissioners make The liabi
itv f253l y more than the actual amount OF the
rectness of this result there cannot be two opinions
all the details of the calculation given i'll Table and
given their data with the completeness, should
have been enabled TO in what manner their figures
have been tempered with.
As the Commissioners give only their estimated value
of the difference between the values of the liabilities
and assets under the policies therresu may be account
ed Tor by supposing that they have by arbitrary
assets or it might be by partly the means and partly
the other shall again reGur to this part Of the 9ues
ton while III the mean time refer to the balance sheet
1t should be understood that it is no part of the duty of
the commissioners to adudicate as to the relative and
individual interests of policy holders in company
Their functions limited the determination of the
fact whether company has sufficient assets to provide for
the claims to arise under It's subsstng policies; and
they differ widely from the functions and duties devov
ing on the company own actuary who has to adjust the
relative interests not only regards the interests of the
various classes of policy holders as between themselves
but also in relation to the shareholders in the company
The commissioners have right to go beyond the simple
fact of asceraining whether there sufficient funds
and property belonging the company meet its
It patent to every one attending to such matters that
v b sGme Si our G sri 1r @
whole of their capital but the engagements entered into
with the policy holders were still scrupulously kept
The risk of the shareholders losing their capital is under
taken by them with their ewes open, is well under
stood when they engage in the venture. T. s
with the corrected ma erias supplied in table A. relative
and leaving all the other figures in the latter table un
Invested capital the 3Oth November last, as will
hereafter appear (see also note pake 81 flR,397,6 92
Reserve necessary to meet claims under policies, as
page4 5S,46s,94O
Difference of surplus 9i38,928 ,752
This result, although, as will hereafter appear not
placing the aspect of the society in the best light is still
widely different from that of the commissioners who
vert the surplus into deficit of f222, 36456.
1t may also be here mentio red that have calculated
the assets and liabilities the policies set forth in table
A, according to the table of Mortality which is most
ensvely used by Life Offices in this country namely the
ference in favor Of the society over that adopted by the
commissioners of f22S252. The detailed calculations
given in table b.
We shall endeavor explain the cause of the dis
parity between he results seth forth the last column
Of the table in page of the commissioners report and
those arrived at in table A, already described.
top of page A. f2S93l22 than that determined by
table A. or exactly difference of 81 per cent In page
of their report, the commissioners say:-
"A provision Is made for expenses and dividends by adj
ding to the mathematical premium what is called load
ing, which, III the case OF the LterhdHondt Is ~ per
cent when the policy holder participates in profits, and
2Oper cent when he does not
lhls statements viewed IN connection Win me results
of table A, and the commissioners figures in page 4,
make It evident that they have in their calculations de-
Quoted from the present value of the future premiums
payable, somewhere about 81 or 80 per But grant
ing to the commissioners for the sake of Illustration
that they entitled to deduct the full margin of the
loading the premiums, il does not follow that because
the loading is 30 per cent there should fall to be deducted
from the present value Of the premiums also ~ per
cent.
The full loading of 80 per cent the original math
ematca premium they term 1t, will only form
gin to be deducted from the gross premium Of 24S per
cent in order to replace the original premium before
loading and yet the commissioners, evidently blind to
this simple principle have actually deducted 80 per cent
and thus violated their principle Of yauing only net
fact is only necessary to read the six lines In contlnu-
of the last quotation from page IA of their report
which Is deliberate statement that because the loading
Is 70 cent Onc-fth, also must the deduction
be one-1h; whereas the true deduction TO restore the
original premium should be only one-sxth part of the
premiums 1t certainly to be lamented that men