Open main menu
This page needs to be proofread.
LIFE INSURANCE]
667
INSURANCE


Society of America, which has established a high standard of professional competence in its examinations and transactions. The question how far the rate of mortality among insured lives in America is fairly represented by tables drawn from British experience has attracted much inquiry; and many companies have made important contributions to it from their own records, in several instances in the finished form of carefully graduated tables, each with an individual character, but all with some features which distinguish them as a group. By far the most com rehensive effort to establish a standard table for America is that of) a committee of actuaries, for which, in 1881, L. W. Meech published the classified experience of thirty offices to the end of 1874, including most of the large companies in the United States, and embracing more than a million policies. The observations collected in this work have furnished materials for many important investigations, but the finished tables have rarely been applied in practice, being drawn from an aggregation of largely incongruous experiences, the influence of each of which upon the general average is indeterminate. The business of life insurance upon the continent of Europe has given an extraordinary stimulus to actuarial studies. Before 1883 the German companies computed their premiums and reserves by antiquated life tables. The most approved of these, as illustrating the duration of German life, was that prepared by Brune of Berlin in 1837 from the records for seventy years of an annuit society for widows, which practised careful medical selection of the husbands and kept exact mortality registers. In 1883 was published an admirable table founded on the combined experience of twenty-three German companies, which has superseded all other standards for ordinary valuations within the German empire. The French companies generally continued to rely on the tables of de Parcieux, with modifications of their most laring defects, until a still later date. In 1898 a committee of French actuaries published a new set of tables drawn from the experience of four of the principal offices in France, and these are now accepted as the best basis for life insurance practice by similar companies there. Schools of actuarial science have been opened in both Germany and France, and the professional actuaries of these countries, and of Austria and Belgium, have formed associations for the promotion of their pursuits. Sessions of delegates from the several institutes and societies of actuaries throughout the world meet triennially in general congress in the various capitals. Such sessions do much to broaden and harmonize the scope and aims of the profession.

Elaborate efforts have been made by several governments to employ the machinery of census bureaus for determining the average duration of life, such as the extension and concentration of many industries, the vast growth of cities, the progress of medical and hygienic science, the increase of wealth, comfort and luxury, the changes in the frequency and destructiveness of war. It is plausibly maintained, on the one hand, that these and other causes have already added some years to the average lifetime of civilized man; and, on the other hand, that their combined effect has been to lessen the sharpness of the struggle jfor existence, to rescue the weaklings from destruction and enable them to multiply, and so to weaken society at large. The final decision of the question will be found in the gradual modifications of the true table of mortality through successive epochs.

For the purposes of life insurance the future of mortality tables looks to less ambitious problems. The business calls for exact equity in determining the value of all life contingencies, and therefore for the most precise forecast attainable of the dates at which the amounts assured must be paid. Some idea of the historical progress of this inquiry may be gathered from the accompanying table, which epitomizes the general characteristics of a number of typical tables of mortality, showing at ages which are 'multiples of five years the annual death-rate indicated by each of them. The comparison will be found interesting in many ways, most strikingly, perhaps, as suggesting what is conhrmed by a detailed examination of the facts, that insured life on the average in Great Britain is decidedly inferior to that in the United States, but superior to that upon the continent of Europe, and especially in Germany. From a careful investigation of the published experience, Dr McClintock concludes: “ It is an ascertained fact that after the first five years of insurance the probability of death, ” in Great Britain, “ is fully onefifth greater at any given age than the corresponding probability shown by American experience ”; while “ the average value of assured life in Germany is as much inferior to that shown in the Hm- experience as that in America has been found to be superior.” 1

during the intervals,

general rate

fx:, ;$£v of mortality,

and it has

been the worthy ambition

of able actuaries

Table showing the number of Persons who will die in 0, year ou! of l0Q,000 who have attained the given Age, according to several Tables of M ortalzty.

North-

Twenty

Seventeen Institute Institute American Thirty three Ge; Four - t Carlisle. 05, of 0f Experi- American French iietriigseoftigsggséigi; Age. amp on Y ces Actuaries. Actuaries, ence. Offices. ()nf§ cI;S Offices. census returns for this 8 8 8 ' FHL '86 Tim, 8 868 7 88 V 88 7 8 purpose' The British 17 o. lr 15. 1 43. 3 1 9. 1 1 1 1. 3 1 3. 7 1 95.7 Statistical Office IO 916 449 676 l 490 400 749 648 .. 364 under Dr William Farr 15 922 619 694 287 l 325 763 659 - - 515 and his successors, Z;, iégg , Egg gig

Rnd, 121161, the 5W1SS 30 1,710 1,010 842 772 ~ 920 8 748 882 698 43

Federal Bureau of 35 1,870 1,026 929 877 1,000 895 821 999 807 Statistics have accom- 40 2»090 M330 11036 1»031 11132 972 936 11176 972 Plishsd fhe best WO* ii 1 § '§§§ E42 § '§ Zf, § '§§§ iii; § '§ , § 8 iii? ~§ "§ i?, i'2§ 8 in 11115 di1'@CU0I1, 3-115 55 3,350 1,792 2,166 1 2,103 2,219 1,857 1,893 2,506 2,258 the series of “ English 60 4,023 3,349 3,034 2,968 3,064 2,669 2,653 3,535 3,213 Life Tables, ” founded 65 4,902 41109 4,498 41343 41461 41013 3.864 4,943 4,675 on Successivg d, , 70 6,493 5.164 6.493 6,219 6.284 5,199 5,773 7.276 6,897 75 91615 91552 9,556 9316 9,949 9»437 3,779 101647 10»241 @<=1m1a1 Censusesi m' 30 13433 123172 141040 141465 14,577 14»447 13»407 151516 15»119 terpreted by the 85 22,043 17,528 20,509 20,988 21,010 33,555 20,363 22,211 22,332 registered deaths 90 26.037 26,056 32673 271945 231244 45,455 32,815 32,356 321225 are the most useful data now available for the average value of civilized life. But all such general tables are as yet but tentative and provisional. The imperfections of mortuary registries and of census returns are great, and corrections are largely conjectural. Until more complete methods of collecting the facts are practised, the experience of life insurance companies promises to furnish the only mortality tables having claim to authority. It is already becoming evident that the general rate of mortality, and in particular the rate at each age of life, not only difiers widely in different communities, but undergoes important changes in successive generations. A multitude of forces are at work in civilized society which must influence the N 0 final explanation has been given, and there is no proof that the average life in America is longer than in England or Germanyi Dr McClintock inclines to believe that one potent cause of the great difference in the insured experience mzzx is that. while European offices have generally awaited, ;¢, ,, applications, which are commonly prompted by some sense of need for insurance, the custom of American companies is actively to solicit business through agents. On the average, lives which are only induced by persuasion to insure are better than those which voluntarily apply. That this suggestion points 1 On the Ejecis of Selection, by Emory McClintock (New York,

1892), p. 94.