Modelling Life

Here is how Elizur Wright described whole-of-life insurance in 19th century’s America. He published his critical pamphlet in 1877 under the title ”Traps baited with orphan; or, What is the matter with life insurance” where he showed with actuarial arguments how the insurance companies were ripping off their policy-holders through exorbitant paid-up fees on whole-of-life business that basically annihilated the surrender value of the policies. Policy-holders trying to protect their families against adverse circumstances found themselves stuck if, for whatever reasons, they were unable to pay the premium. We are not talking here about risk business, as those policies had reserves calculated on the basis of whole-of-life, but those reserves were contractually stolen from the policy-holders. “Traps baited with orphan” is a pamphlet that is both technical and emotional. It appeals to reason and also to the compassion of readers who would hate to see orphans lose their entitlement because n...

Poet-Actuary - This sounds like an oxymoron. You imagine a poet as an emo, an individual characterized by great passion, moved by words, in touch with their feelings. Then you think of an actuary as a Maths-nerd, a person of a few words, not the life of the party. You wouldn’t necessarily associate the words poet and actuary. They belong to two different worlds... or do they? Back again in the 80’s, as a schoolboy in a little French country town, I would have to learn the Fables of La Fontaine. Jean de La Fontaine was a story teller who used poetry to tell parables, or fables. He would come up with those unusual stories, such as the Frog and the Rat, starting with the statement: “They to bamboozle are inclined, Saith Merlin, who bamboozled are.” His stories involved random animals teaching humans a life lesson - Thy Shalt Not Bamboozle Thy Neighbour. There was always the “moral of the story”. One of his famous fables was the Tortoise and the Hare, one inspired by the Greek poet A...

Until recently I only knew Edmond Halley as an astronomer and I still remember our school activity when his famous comet appeared in 1986. Back then, a schoolboy in France, I drew a picture of Halley’s Comet and imagined the world as it will be when the comet returns, that is in 2061. I have no recollection of what I thought the world would look like in 2061. I probably thought of a world with spaceships travelling to Mars and aliens living alongside humans. I am lucky enough to be one of those few people who will probably see the comet twice, provided my survival curve keeps up its rectangularisation. Halley himself didn’t have this opportunity, as he died before the comet returned. That was all I knew about Edmond Halley, until I read his revolutionary article on annuities. You can call me a nerd, but I was quite excited when I found free access to the 1693 article on the Royal Society’s website. It was like discovering the Dead Sea scrolls. I was reading arguably the oldest scientif...