The merger, a few years ago, of two large composite insurance company Groups brought together under one ultimate control three substantial life assurance funds each fully operative and transacting all types of ordinary life assurance and annuity business. Those three funds have now been fused together by the legal transfer of the life businesses of two of the companies in the Group to the parent company and, as this fusion seems to be the first of its kind which has been undertaken for many years, and certainly the first of such size in the life assurance history of Great Britain, it has been suggested that the operation is of sufficient interest to actuaries generally as to warrant the submission of a paper to a sessional meeting. We are, however, conscious of the fact that, whilst the operation may have added to our history as a practical application of the law and some of our principles, it has not added either to previous knowledge or to our technique. The law governing the operation has remained virtually unchanged since the comprehensive review of life company amalgamations by the late K. J. Britt in the paper he submitted to the Institute in April 1931 (J.I.A. 62, 276) and probably the whole of the technical aspects involved have been expounded by Redington in the masterful review of the principles of life office valuations which he submitted in April 1952 (J.I.A. 78, 286).

This paper is concerned with our relationship to the outside world; for by doing all our own teaching and examining we tend to live in a world of our own. It asks what have been and what should be our contributions to investment thought; and where are our teachings different or our views insular.

Most of the activity of actuaries with computers to date has been concerned with putting actuarial work on to computers, or—at one stage further back—putting life office data on to a computer data-processing system. This paper attempts to contemplate the next stage, the effect of computer knowledge and familiarity on the profession and its techniques.

In the train of the economic integration of Europe, a lively discussion has, for some time, been carried on about appropriate criteria of solvency for insurance undertakings in respect of life and non-life assurance. The conflict over the proposals for solvency requirements in non-life assurance still occupies the foreground. Here it is the proposed directive put up for discussion by the E.E.C. authorities which is of particular importance. This directive puts forward quantitative conditions for the solvency reserves of companies carrying on non-life business.

This is the preamble to the petition presented to the Secretary of State's office of the British Parliament in April 1757 by the promoters of ‘The Corporation for Equitable Assurances on Lives’, the seed from which modern life insurance has sprung. It is undoubtedly the clearest statement made as to the purpose and justification of the life insurance industry and stands as a challenge to those engaged in it.

For the last thirty years the teaching of statistics in universities in this country has been dominated by the relative frequency theory of probability, exemplified in Richard von Mises's book, Probability, Statistics and Truth. This statistical definition along the lines of the long run frequency concept of probability can be illustrated by asking what meaning is to be given to the statement ‘the probability of getting a head on a single toss of a penny is one half.’ The relative frequency adherent would answer something like ‘in a long sequence of repeated tosses, the proportion of outcomes that are heads is one half’. In the last ten years, however, an alternative approach has come to the fore, under the general title of the Bayesian Approach to Statistics. A Bayesian adherent would answer something along the lines that he would be ‘prepared to offer even money on getting a head on a single toss’.

This report presents the results of an investigation into the mortality of impaired assured lives during the period 1947-63. A preliminary account, outlining the nature of the investigation, was given by the first author in his Presidential Address to the Assurance Medical Society in 1955, and a report on the results up to the end of 1958 was given in a paper by the second author, which was presented to both the Institute and the Faculty of Actuaries in 1961 (J.I.A. 87, 196, and T.F.A. 27, 20). Earlier this year the first author read a paper to the Assurance Medical Society which gave the statistical results up to the end of 1963. These same statistics form the basis of the present paper, but the text has been revised and expanded. Certain passages in the present paper, notably §§ 7, 8, 9 and 11 which describe the recording and tabulation of data, have been reproduced from Clarke's 1961 paper.