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The Actuary The magazine of the Institute & Faculty of Actuaries

British Actuarial Journal (BAJ)

Vol 8 Part II

The latest published part of BAJ contains a thoughtful guest editorial from Dugald Eadie reflecting on the catch phrase for the actuarial profession, making financial sense of the future, and wondering whether some areas in the past have made financial sense, and what was the actuarial profession’s role in them. The editorial speculates that making financial sense in the future would extend to educating the public at large about the financial facts of life.

Fair valuation of liabilities
This paper, presented by the Fair Valuation of Liabilities Working Party, summarises and comments on a number of the principal features of the accounting standard for insurance being progressed by the International Accounting Standards Board up to September 2001. The proposals of the standard are very balance-sheet-driven, with assets and liabilities to be shown at fair values, which are to be market values for quoted instruments. The paper goes on to consider how a system of prudential reporting for regulatory purposes might be built on a fair value reporting base, and proposes six principles of which this should be done. The emphasis of the paper is reporting on life insurance business, although many of the principles have wider applicability.

The paper was submitted to both the Faculty and the Institute where the proposals in this paper received general though not unanimous support.

Lessons from the Equitable

This article summaries a discussion at the Faculty on 29 November 2001 following the publication of the report of the Corley Committee of Inquiry.

A multi-state model of disability for the United Kingdom: implications for the future need for long-term care for the elderly

This paper develops a multi-state model to project the number of people with disabilities in the United Kingdom over the next 35 years, thus identifying implications for demand for long-term care for the elderly. Three types of data (prevalence rates, transition rates, and trends) are required, and recent trends in healthy life expectancy data are used to frame assumptions as to future disability rates of the UK population. There will be a large increase in the number of elderly people in the UK over the next 35 years, but the projections suggest that the number of elderly people requiring long-term care could be helped by a reduction in the proportion of older people who are severely disabled.

Papers from actuarial journals worldwide

Finally there are abstracts of papers in Geneva Papers on Risk and Insurance Theory 26(3) 200, Insurance: Mathematics and Economics 30(2), 2002, Journal of Risk and Insurance 69(2), 2002, and the North American Actuarial Journal 6(1), 2002. Several papers in NAJ 6(1) relate to the matters discussed in the fair valuation of liabilities article in this issue of BAJ.