The theme of this paper is that life office valuation can be based on an analysis of the characteristics of the individual cash flows which form the net cash flow of an office. These cash flows may be compared with the income and gains derived from traded securities such as equities and gilts in order to assess their values. Standard asset pricing models of modern portfolio theory enable one to allow for lapse, mortality and other risks.

The methodology outlined in the paper is illustrated by reference to the very different types of revenue generated by non-profit, unit-linked and with-profits products. It is also used, in the valuation of future new business, to allow for the risks that expected sales volumes and profitability levels will not be achieved.

The paper provides a rationale for the choice of discount rates used in the valuation of a life office and facilitates the comparison of life office and alternative investment opportunities.

The aim of this paper is to extend the analyses of our earlier work (Haberman & Bloomfield, 1988)by incorporating mortality rates of male children categorised by age and social class. Data recently made available in an annex to the Decennial Occupational Mortality Investigation are utilised to produce graduated mortality rates specific for age and social class and to extend the social class specific life tables down to cover the full age range.

This note continues a regular series on mortality rates in Great Britain, showing the mortality experienced in each age-group in 1990 and comparing this for broad age-groups, on a standardised basis, with mortality in earlier years.

The paper gives details of statistical modelling techniques which can be used to estimate risk and office premiums from past claims data. The methods described allow premiums to be estimated for any combinaton of rating factors, and produce standard errors of the risk premium. The statistical package GLIM is used for analysing claims experience, and GLIM terminology is used and explained thoughout the paper.

Arguments are put forward for modelling frequency and severity separately for different claim types. Pitted values can be used to estimate risk premiums, and the incorporation of expenses allows for the estimation of office premiums. Particular attention is given to the treatment of no claim discount.

The paper also discusses possible uses of the modelled premiums. These include the construction of ‘standardised’ one way tables and the analysis of experience by postal code and model of vehicle. Also discussed is the possibility of using the results for assessing the impact of competition, and for finding ‘niche’ markets in which an insurer can operate both competitively and profitably.

The Report begins by discussing the origins of the actuarial profession in the United Kingdom and the recent growth in its size.

The aim of the Report is to describe the more significant recent developments which affect the actuarial profession in the U.K. These developments are discussed under the following headings:

Planning,

Education,

Life assurance,

Pensions,

General insurance,

Relationships with actuaries overseas,

Groupe Consultatif,

Mortality and sickness insurance statistics,

Investment indices.

Within each heading there is a discussion of current topics and, where appropriate, of possible future developments.