The past 25 years have brought dramatic improvements in mortality rates in Great Britain. Infant mortality is now about 40% of what it was a quarter of a century ago: death-rates for children have been reduced to less than 1 per 1000. Not only children have benefited; young adults in the 15–44 age-group experience mortality little more than a third of what it was in the early thirties, whilst women aged 45–64 have had an improvement of about 40%.

It is therefore regrettable that the experience of men aged 45–64 is a black spot in the general picture. The improvement for men in this age-group has not kept pace with that for women of the same age, being only about 15% in 25 years, little more than ½% a year. Table 1 compares the death-rates for men and women in post-war years and demonstrates very clearly how over a period of 12 years the ratio of male to female mortality has steadily increased.

This subject can appear difficult, but the main idea is delightfully simple. Let us consider an example. Suppose that a life office has issued policies at premiums based on a certain rate of interest, investing in Stock Exchange securities the premiums received from year to year, less claims, and that after a time the rate of interest rises permanently. The market value of the investments will fall and the office will lose if they have eventually to be sold, but will gain to the extent that future premiums can now be invested on more favourable terms. The gain is fixed but the loss will vary according to the redemption dates of the assets, since the longer the date, the greater the fall in value. Immunization consists in selecting investments such that the loss balances the gain. An alternative way of looking at it is on the basis of present values. The values of the assets on the one side of the balance sheet, and the net liabilities on the other, will both fall if interest rates rise. We want them to fall by the same amount, and as our liabilities are fixed, we must seek to achieve that result by a suitable choice of assets.

This paper was intended to be a further paper in the series that has been presented to the Students' Society featuring the work of the Actuary overseas. The first was T. R. Suttie's paper, ‘The Actuary in Canada’ (J.S.S.13, 199), and subsequent papers were by D. Drybrough, ‘Life Assurance in Australia’ (J.S.S.14, 1), and by de Smidt, Williams and Rodger, ‘The Actuary in South Africa’ (J.S.S.14, 348). In view of the fact that a number of British actuaries are now working in the United States, it was thought that a further paper might deal with the position there, despite the difference that in this case actuaries do not look to the Institute and the Faculty as the seats of learning, although Spurgeon's text-book was until recently an official text-book for the Society of Actuaries.