Actuarial practice has been changing rapidly over recent decades, and this speed of change is likely to continue. The actuary of the future will face challenges from many quarters, including the need to communicate with multi-disciplinary teams of competing professionals, and to live in an increasingly multi-national and cross-border environment. The discussion paper reviews such trends and challenges, both national and international, and seeks to stimulate a discussion of key issues, including supply and demand, expanding the scope of actuarial work, the role of the consultant, training implications and the development of a more international profession.

This paper sets out a framework, based on option pricing theory, that can be used to assess the value of deferred unrealised capital gains tax. In the U.K. and Australia, capital gains tax is paid on realisation of assets and the basis for determining the tax allows for inflation indexation of the cost base of the asset. Capital gains tax payments under these circumstances are shown to resemble those of a complex option. A number of theoretical approaches to the valuation of this option are discussed in the paper.

In this paper it is demonstrated how recently developed statistical techniques designed to facilitate the joint modelling of the mean and dispersion are well suited to model the presence of duplicate policies in graduation.

This paper considers a general framework for the selection of assets to meet the liabilities of a life insurance or pension fund. This general framework contains the mean-variance efficient portfolios of modern portfolio theory as a special case. The paper also demonstrates how the portfolio selection and matching approach of Wise (1984a, 1984b, 1987a, 1987b) and Wilkie (1985) fits into this general framework. The matching portfolio is derived as a special case, and is also shown to have implications for determining the central value of the liabilities.

The consequences of graduating truncated English Life Table data by either the Gompertz or truncated Heligman and Pollard ‘laws of mortality’, recently advocated by Thatcher (1990), are examined in greater detail.

Continuing process of updating company classifications.

Sixty constituents deleted during 1991—more as a result of casualty rule than those taken over.

Only forty eight replaced—reflecting difficulty in finding suitable new non-industrial constituents.

No end of the year group changes at the end of the year—for the first time since end-1988.