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The Actuary The magazine of the Institute & Faculty of Actuaries
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Origins of life in Japanese

Japanese TV channel NHK filmed material from the Profession’s archive recently, for the programme SomoSomo on the origins of life insurance. Catherine Henshall reviews the results.

The programme begins with a survey of how Japanese society has evolved, and the rise of the modern ‘salary-man’. For this iconic businessman — an office worker with a wife and children at home — life assurance became important in order to provide financial security for his wife and children in the event of his death.

Next we turn to England in the mid-18th century and the origins of life assurance. We observe Hogarth’s print Gin Lane (of 1751) showing dire poverty and people dying on the streets. Alongside this, the need and desire to protect the family income was growing. The programme then dramatises James Dodson’s application to the Amicable Society. He witnesses the society’s insurance panel assessing applicants, and one applicant being turned down because his red face signalled a bad heart and the likelihood he would die young. On his turn, Dodson is angered when he too is refused by the insurer on account of his age.

We see James Dodson become a cartoon character contemplating scenes of risk. His writings on mathematics turned to questions of insurance and he went on to write an original ‘Lecture’ outlining a fairer basis to offer life insurance and calculate tables of mortality and premiums for each age. Sadly Dodson died only a short time after this, leaving a wife and family.

Several years after his death, the Society for Equitable Assurances was founded in 1762 by others using Dodson’s pioneering actuarial principles. Turning back to Japan, we learn of Yukichi Fukuzawa, revered nineteenth-century social reformer, who introduced life insurance to Japan and now appears on the 10,000 yen banknote.

During the Second World War, women worked for life insurance companies as the men were away fighting. The bubble in Japan would burst and seven life insurance companies failed one after the other.

The programme concludes by explaining the concept of pooling risk and sharing the cost of insurance among the surviving policyholders. SomoSomo translates as ‘in the beginning’ or ‘originally’ and the programme was broadcast in Japan on 28 September.