Insurance is a contract under which one party, called the Insurer, or Assurer, agrees, in consideration of a sum of money called the Premium, to pay a larger sum of money to another party, called the Insured, or Assured, on the happening of a designated contingency. Insurance has sometimes been said to be akin to gambling, but it is really the converse. The gambler seeks excitement and gain by the artificial manufacture of hazardous speculations. The prudent man resorts to insurance in order to secure peace of mind and immunity from the loss which might arise from contingencies beyond his control. The gambler creates or exaggerates risks; the insurance office equalises them.
The origin of insurance is lost in antiquity. At a very early period merchants insured their vessels and goods against the perils of the seas, and probably marine insurance was the first description to come into existence. From insuring ships and merchandise, the step was not a long one to insure for the voyage the life of the captain, on whom so much depended; and we therefore soon find traces of such contracts, the insurance frequently providing for the sum assured to be paid, not only in the event of the death of the captain, but also in the event of his capture by pirates, or by the king's enemies. Moreover, the merchant in those early days frequently accompanied the vessel in which his goods were shipped. Possibly he had obtained the goods on credit, on condition of paying double their cost should he return safely, and the creditor would thereupon insure the life of the merchant for that particular voyage. Life assurance proving in this connection very convenient, it gradually was resorted to in other business transactions, and ultimately came to be sought as a means of family provision.
The first evidence of fire insurance is to be found in connection with the Anglo-Saxon guilds, although probably it also was a development of marine insurance. The reader will find full information on the historical aspect of the subject in the various articles in Walford's Insurance Encyclopædia, and in an essay on the 'History of Life Assurance in the United Kingdom,' by the same author, in the Journal of the Institute of Actuaries (vols. xxv. and xxvi.).
Life Insurance.—The earliest life-assurance policy of which particulars have been preserved was made on 15th June 1583 at the 'Office of Insurance, within the Royal Exchange,' in London. Full details of this policy have been preserved, because it gave rise to the first authentic disputed claim. The policy was for £383, 6s. 8d., to be paid to Richard Martin in the event of William Gybbons dying within twelve months, and the policy was underwritten by thirteen different persons who guaranteed sums of from £25 to £50 each. The premium was at the rate of £8 per cent. William Gybbons died on 28th May 1584, and the underwriters refused to pay because he had survived twelve months of twenty-eight days each. The Commissioners appointed to determine such cases held that the twelve months mentioned in the policy meant one full year, and they ordered the underwriters to pay. These appealed to the Court of Admiralty, which then had jurisdiction in such cases, and where in 1587 two judges upheld the decision of the Commissioners, so that eventually the underwriters had to pay.
The existing company known since 1698 as the Hand-in-Hand was started in 1696 under the name of the Amicable, and is therefore the oldest insurance company in existence, but it did not begin life business until 1836. The earliest known life-assurance company was established in 1699, and called the 'Society of Assurance for Widows and Orphans.' This was what now would be called an assessment company. It did not guarantee a definite sum assured, in consideration of a fixed periodical premium, but by its constitution it was to consist when full of 2000 members who were to contribute 5s. each towards every death that occurred among the members; this contribution being designed to raise £500 on the death of each member, contingent on all members paying up.
The next life-assurance institution started was the famous Amicable (a different company from the Amicable already mentioned). It was founded in 1705, and chartered by Queen Anne on 25th July 1706. Walford, in his History of Life Assurance, states that the plan of working was this: The number of members was to be 2000. Amongst the representatives of those who died in the first year one-sixth of the total contributions was to be divided; in the second year, if the full number of members was enrolled, £4000; in the third year, £6000; in the fourth, £8000; in the fifth and subsequent years, £10,000, with a proportionate reduction if the full number of members was not enrolled. The full contribution from the complete roll of members would be £12,000 per annum, and the surplus was to be accumulated. The Amicable lasted as an independent institution until 1866, when it was transferred to the Norwich Union Life Insurance Society, and its policies were finally merged in those of the Norwich Union on 30th June 1886. Various other life offices of the assessment order were started about the same time, but all except the Amicable disappeared on the bursting of the South Sea Bubble in 1720. In 1721 the London Assurance Corporation and the Royal Exchange Assurance Corporation, both of which had been chartered in 1720, received additional powers, under which they were authorised to transact life business. These twins both remain strong corporations at the present day, and are therefore the oldest surviving life offices in the world. The first life policy of the London Assurance Corporation was issued on 7th June 1721. The only other life office which we shall mention here is the Equitable, established in 1762, and prosperous still. Its history for now more than a century and a quarter has been the history of life assurance in England. Its affairs have been conducted by men eminent in the assurance profession, and to its cautiously directed enterprise in early days we are in great part indebted for the scientific soundness of the foundation on which the business of life assurance stands. Since the passing of the Life Assurance Companies Act in 1870 it has been possible to trace minutely the history of every life company. Owing to amalgamations they are diminishing in number. At the time the Act of 1870 was passed there were about 130 in active operation, a number reduced in 1890 to only 88. Under the Act of 1870 a deposit of £20,000 must be made with the Court of Chancery before a company may commence life business, and this discourages the formation of new offices.
The elementary principles of life assurance are very simple. At first the rates of premium were fixed in a purely arbitrary manner, the result of guess-work, and no difference appears to have been made in respect of persons of different ages. But as experience was gathered it came to be seen that history repeats itself with great precision; that out of a given number of persons alive it can be approximately foretold from the results of the past how many will die within a given time; and it was further seen that the rate of mortality has a tendency to increase with the age of the lives observed—that is to say, for instance, that out of a thousand persons alive aged thirty fewer will die in a year than out of a thousand persons aged sixty. The first result of this advance in scientific knowledge was that a limit of age was fixed beyond which applicants were not admitted into the assurance offices, the Amicable refusing all aged forty-five and over; a little later on the Equitable was started upon the still more scientific principle of charging rates varying according to age. Early investigators tried to embody the results of experience in tabular form, and so produced forerunners of what are now known as mortality tables. These show, out of a given number born, how many complete each year of age, and by means of a properly constructed mortality table the rates of premium which should be charged for the assurance of lives can readily be calculated. John de Witt, Grand-pensionary of Holland, was apparently the first to apply scientific principles to the calculations connected with annuities, which are analogous to those connected with assurances, his report on this matter being distributed to the members of the States-general on 30th July 1671. The first mortality table was based upon observations in the city of Breslau, and was prepared by E. Halley, Astronomer-royal of England, and published in the Philosophical Transactions for January and March 1693. The first tables of premiums used by the Equitable Society were prepared from the mortality of the year 1741 by James Dodson, author of the Mathematical Repository, who was associated with Thomas Simpson, the well-known mathematician, in founding the society. Later on the Equitable adopted tables derived from the London bills of mortality, and later on still, that known as the Northampton table, constructed by Dr Price from the statistics of the parish of All Saints, Northampton, during forty-six years from 1735 to 1780. The earliest mortality tables were prepared from a record of the deaths alone; but it was subsequently discovered that this gave erroneous results, and had a tendency very much to exaggerate the estimate of mortality. Joshua Milne, actuary to the Sun Life Assurance Society, seems to have been the first to construct mortality tables correctly by comparing the numbers dying in each year of age in a population with the numbers alive at each age. On this principle he constructed the famous Carlisle table, based upon the population of the parishes of St Mary and St Cuthbert, Carlisle, in 1780 and 1787, and the number of deaths that took place in each interval of ages in the same two parishes during nine years, beginning with 1779 and ending with 1787. The Carlisle table formed for many years the basis on which were calculated the premiums and the reserves of a great many of the leading insurance companies, and so accurate was it that even at the present day its use has not been entirely discontinued. The records of the Equitable Society furnished materials for the construction of mortality tables from the experience of assured lives, and Griffith Davies, F.R.S., actuary to the Guardian Assurance Company, compiled the Equitable assurance table (1825) from data he derived from the annual addresses of the actuary of that office. Later on a committee of actuaries collected the experience of seventeen insurance companies, and the results were published in 1843. Again, the Institute of Actuaries collected the experience of twenty companies and gave it to the world in the volume of Mortality Experience in 1869; and these last tables are at the present day considered the best, and with British insurance companies are rapidly superseding every other. Many individual companies have also taken out their mortality experience, and tables have been prepared from the experience of foreign companies by American and continental actuaries.
In the calculations of a life office the probabilities of life are combined with the interest of money. To take the simplest possible example: According to the Institute of Actuaries' mortality table, out of 1000 children aged ten 956 will attain the age of twenty-one. Now, assuming that exactly 4 per cent. compound interest can be realised, the sum required to be invested at once in order to provide £100 at the end of eleven years is £64, 19s. 2d. If it be arranged that each of the 1000 children aged ten shall receive an endowment of £100 on coming of age, it is clear that 956 such endowments must be arranged for, and the amount now required to provide them is £62,100, 3s. 4d. In respect of each of the 1000 children, therefore, a sum of £62, 2s. must be paid down if he is to receive £100 on reaching his majority. This sum is called the present value of, or the single premium for, the endowment. An annuity consists of a series of endowments, the first payable at the end of one year, the second at the end of two years, and so on; and its present value, or the sum required to purchase it, is found by calculating the value of each of these endowments and adding the whole together. Similarly, if a sum of money is to be paid on the death of an individual, a calculation is made for the premium to cover the risk of death in the first year; so also for the second year, for the third year, &c., to the utmost possible duration of human life; and the results are added together in order to find the single premium for an assurance on his life. For the annual premium an equation is made between the value of an annuity on the life and an assurance on the same life; and thus the annuity—in this case called the annual premium—equivalent to the single premium is ascertained. In order that such calculations may be made easily and simply various monetary tables are in the first place prepared, and the calculations, which would otherwise be so laborious as to be almost prohibitive, are thereby rendered very brief and easy. On principles similar to those adopted in such simple cases as are above indicated, actuaries are able to solve many complicated problems. For instance, it is easy to ascertain what should be the premium for an assurance payable in the event of one person of a given age dying before another person of a different age; or many lives may be introduced with various orders of survivorship. The simpler questions of this nature may be solved directly from the mortality table and the subsidiary tables which are usually prepared from it; but when very complicated questions arise other processes must be resorted to. The late Sir J. W. Lubbock, Bart., in the Cambridge Philosophical Transactions for the year 1829, was the first to give a formula of approximation. Mr W. S. B. Woolhouse, in the Journal of the Institute of Actuaries (vols. xi. and xv.), produced a formula essentially the same as that of Lubbock, but different from it in that he used the differential calculus instead of the calculus of finite differences. Mr G. F. Hardy, in the Journal of the Institute of Actuaries (vol. xxiv.), greatly extended and improved Mr Woolhouse's formula, and threw it into various shapes to suit different circumstances, so that for practical purposes these formulas can now be applied to solve the most complicated questions in a very easy manner. Later on Mr Woolhouse again took the matter up, and, in the Journal of the Institute of Actuaries (vol. xxvii.), investigated the general principles upon which these formulas of approximation are based, and deduced several of still greater power than those which had previously been put forward. Little more therefore remains to be done in this direction.
It has already been remarked that the rate of mortality increases with the age. The usual custom of insurance companies is, however, to charge a uniform premium throughout life, and it naturally follows that this premium must be in excess of that required for the mere assurance in the earlier years when the mortality is comparatively light, so that that excess may be accumulated at interest, and become available in the later years of the policy when the rate of mortality is heavier, and when the uniform premium charged is no longer sufficient for the risk. In this respect life assurance differs from fire insurance. With fire insurance a reserve is required only for the unexpired portion of the time for which the premium has been paid, and to provide against fluctuations and contingencies. In life assurance also, a reserve is required for these objects, but, in addition, a reserve is necessary, as above pointed out, on account of the increasing rate of mortality. Hence it follows that life companies transacting business by uniform premiums must accumulate large funds, which are not profit, but are absolutely necessary in order to meet prospective liabilities. This is clearly shown when a company, as sometimes happens, closes its door to new business, and determines simply to continue its existence in order to run off current contracts. For a time the funds will increase, but presently it will happen that the claims will absorb the whole of the premium and interest income. A little later on the claims will be in excess of such income, and the investments will have to be drawn upon, until when the last policy falls in the funds will be completely exhausted. In the early days of the Equitable Society, when it was uncertain what would really be required to cover the risk, much larger premiums than ultimately proved to be necessary were charged; and, as there were no shareholders, the large surpluses which accumulated were distributed among the policy-holders. This system became so popular that when other companies were started at a later date, although the rates of mortality were much more accurately understood, an additional premium, over and above that required for the risk and for expenses, was deliberately charged, so as to provide a fund out of which bonuses might be paid to the policy-holders. It is now the universal custom of life offices to have a participating class of policy-holders, among whom the periodical surpluses are distributed. There are many ways in which these so-called profits are divided. With some companies the bonuses are large in the early days of a policy, and gradually diminish as time goes on. Others again give comparatively small bonuses at the outset, these increasing with the lapse of time; and others again give practically uniform bonuses throughout the duration of the policy. Some companies make it a feature to return the surplus in cash, or as a reduction of the premium. Others treat the share of surplus belonging to the individual policy-holder as a single premium to provide an assurance on his life, in this connection called a reversionary bonus; so that instead of paying away at once the money to the policy-holders, the sums assured under the policies are increased. Other companies combine these various methods, and give policy-holders their choice. The systems being essentially so different, it is difficult to compare one company with another, and the intending policy-holder should judge for himself which system would best suit his own circumstances, and act accordingly.
The Institute of Actuaries, founded in 1848, was incorporated by royal charter in 1884. Its journal, regularly published now for over forty years, contains a vast number of most important and useful original contributions on the theory and practice of life assurance. All the leading actuaries have contributed, and every discovery of importance in actuarial science has first been published in its pages. By its meetings, at which papers are read and discussed, the institute has also done much to promote the investigation and to disseminate the knowledge of life contingencies. In early days it initiated the system of examinations, and gave certificates of competency to students who satisfactorily passed them, so that the directors of insurance companies could know who were the men qualified for posts that might become vacant. Later on lectureships were added to train the students, and under the auspices of the institute a text-book in two parts has been published, dealing respectively with interest and annuities certain, and with life contingencies; the former by W. Sutton, M.A., and the latter by the writer of this article. Another great achievement of the Institute of Actuaries was the collection of the materials for the mortality experience of twenty companies, and their compilation in the form of mortality tables and monetary tables. The Faculty of Actuaries of Edinburgh and the Actuarial Society of Edinburgh have also done good public service.
The Life Assurance Companies Acts, 1870-72, were passed owing to the disastrous failure of two great companies, the Albert and the European; and under them companies must register their accounts in specified form, and at periodical intervals give very full details relating to their actuarial valuations. The view taken by the British legislature has been that it is well to allow the companies to be managed by their own responsible officials, and that the government should not actively interfere, but that for the protection of the public full information should be available. The acts also have proved a great benefit by providing for the reconstruction instead of liquidation of insurance companies. A third great advantage of the acts has been that reckless amalgamations have been rendered impossible, while amalgamations that are for the good of all the parties interested have not been interfered with. Now such full details of everything that is done in connection with an amalgamation must be published, that anything like extravagance or unjustifiable expenditure is impossible.
Fire Insurance, Marine Insurance.—The contract of fire insurance is a contract purely of indemnity—i.e. the assured may not make a profit out of a fire, but is merely indemnified against loss sustained. Therefore it is not the cost of the goods at the time of purchase that is taken account of in settlement of a loss, but their value at the time of the fire. For instance, if a merchant have stored cotton for which he gave £1000, and if a fire occur when his stock would realise only £800 if placed upon the market, then £800 is the limit of the amount he can recover, although he may have been holding the cotton for an advance in prices. Again, if a householder have a claim upon a company, he can only recover in respect of the value of his furniture and effects, after allowing for the depreciation due to wear and tear—i.e. by the contract of insurance he is entitled only to be placed in the position which he occupied immediately before the fire, and not in one better. In this important respect fire insurance differs from life assurance, because in the case of a life policy, the amount of the interest of the assured is fixed at the time the policy is issued, and he may on the death of the life assured recover that full amount, although at the time of the death his interest may possibly have altogether ceased. The contract of fire insurance differs also in important respects from the marine insurance contract. In the latter, if goods are assured for less than their value, the policy-holder carries the risk himself for the amount uninsured. For instance, if a merchant have goods on a vessel to the value of £1000, and if he insure for £500, and if damage to the goods occur to the amount of £500, he can recover only £250, he being his own insurer for the difference between the value of the goods and the amount of the policy (for fuller information on Marine Insurance, see AVERAGE). In the case of the fire-insurance contract, however, the whole £500 could in such event be recovered from the company, unless in the exceptional case of an average clause having been inserted in the policy. By the average clause the insured is made his own insurer for whatever amount is not covered by fire policies, and it is sometimes inserted in policies covering large trade risks, and also in those covering goods stored in scattered warehouses. By the usual wording of fire policies, the company has the right to refuse a renewal premium, and here again there is a marked difference from a life policy, which is renewable at the option of the assured, but not of the assurer. A fire policy is not assignable without the consent of the office, which it is usual to give by the way of indorsement. Thus, if a merchant whose goods are covered by insurance sell the goods, the protection of the fire policy is not thereby transferred, but the purchaser must make his own arrangements. Thus, in the common occurrence of the purchase of a house, although the house may have been covered by a policy in the name of the vendor, the purchaser cannot recover under it without an indorsement having been placed upon it transferring the insurance from the vendor to himself. The contract of fire insurance is personal between the insured and the office, and the insured can therefore recover only the amount of his own personal loss. Thus, for instance, unless so stated in the contract, the goods of a servant are not covered by the fire policy in the name of the master; and goods in the hands of an agent are not covered by a policy in the agent's name. As the wording of fire policies is very strictly construed by the courts of law, and as the offices for their own protection are often compelled to take their stand on the literal contract, though they seek to meet liberally every bona-fide claim, the policy-holder should be careful to see that his policy is in accordance with his wishes.
Prior to 1869 a special tax was imposed on fire-insurance companies, and the returns they were called upon to make furnished an accurate record of the amount of fire-insurance business transacted in the country. In 1869, however, the tax was repealed, and a stamp of one penny only on each policy was substituted. The result is that, except in the metropolis, where for the metropolitan fire-brigade, under act of parliament, a rate is paid by the companies in proportion to the amounts assured, it is impossible to say what is the total business of the country. Many of the companies voluntarily publish their accounts, and show their premium income, and those with a life department must do so; but in the case of purely fire offices this is not compulsory.
Fire offices may be broadly distinguished as tariff and non-tariff. The tariff are those which belong to the Fire Offices' Committee, an association formed for mutual protection, and, by the regulation of rates, to obviate destructive competition. The non-tariff offices are those which profess to estimate each risk on its merits, without fixing a minimum, but most frequently those offices which try this plan find it unsatisfactory, and subsequently join the tariff. Great Britain is eminently the country of successful fire offices, and several of the British companies are larger than any established in any other part of the world. Many of the British offices transact an enormous foreign business.
Industrial Insurance is the name given where life policies are of small amount, and secured by weekly, or at most monthly, premiums. The premiums vary from d. to 3d. or 6d. a week, and it is usual, instead of the premium being adjusted to the age, to adjust the sum assured; so that, while at all ages the premium is the same, the amount of the policy decreases with the age of the life at entry. An enormous industrial business is transacted in Great Britain, partly by insurance companies and partly by collecting Friendly Societies (q.v.). One industrial company alone—the Prudential, established in 1848—received in industrial premiums in 1889 the huge sum of £3,336,742.
Accident Insurance generally provides for a sum payable in the event of death by accident, or for compensation, either by way of a lump sum or of a weekly allowance, in the event of injury or disablement from accident. Even in early times there are traces of accident business, but the oldest and largest existing accident company is the Railway Passengers', established in 1848. At first, as its name implies, it confined its operations exclusively to railway accidents, and accumulated a premium income of £12,000 a year, but before long it enlarged its powers so as to transact accident business of every description, and in 1896 its premium income was £2,740,000. Besides transacting accident business proper, many of the companies combine with it employers' liability assurance—i.e. they guarantee to refund to employers any damages they may have to pay through accidents to workmen in their service; but without the greatest care this department of the business is unremunerative. Some of the accident companies also issue policies providing weekly compensation in the event of incapacity from illness; but generally it has been found that, on account of the difficulty in defining illness, and on account of the great liability to fraud, sickness insurance has been unprofitable.
Fidelity Guarantee Insurance.—The first attempt at fidelity guarantee insurance appears to have been made in 1720, but it was many years before the business took root. The first fidelity office—'The Guarantee Society'—was established in 1842. The object of fidelity guarantee insurance is to secure employers against fraud on the part of their clerks and servants.
In the United States of America an enormous life business is transacted by the native companies, and one of them, the Mutual Insurance Company of New York, is the largest office in the world, while several of the others far surpass in magnitude any British company, except perhaps the Prudential. The premium income of the Mutual of New York in 1889 was £4,745,572, and the new business transacted in that year amounted to £30,310,912—more than ten times that of any British office. The aggregate premium income of the forty leading American offices in 1889 was £28,199,804, while the total premium income of all the ordinary life-assurance companies of the United Kingdom was only £13,928,001. It must, however, be remembered in comparing these figures that three of the American companies—viz. the Mutual of New York, the Equitable of New York, and the New York Life—are almost cosmopolitan in their nature, and transact a gigantic business throughout the civilised world, whereas the great majority of British companies transact but a small foreign business.
American insurance law differs in very many respects from that of Great Britain. The principles have been adopted of strict state supervision, and of a standard of solvency. In each of the states there is an officer charged with the duty of examining into the affairs of insurance companies, of making valuations, and of reporting the results of his investigations; and if the assets are not sufficient to meet the liabilities as legally estimated, the company is compelled to close its doors. As each state of the Union legislates on insurance matters quite independently of all the others, considerable confusion has been produced. In different states different standards of solvency are set up, and it might quite well happen that in one state a company might be adjudged bankrupt, while in another the commissioner might on the same day give his certificate that it was in a position to meet all its engagements. Practically, however, these anomalies do not cause much inconvenience, and the various states are gradually assimilating their regulations. One principal feature of the American system of transacting business is the Tontine (q.v.) system, which has grown to gigantic proportions. In England, in almost all cases, the surpluses are distributed among the policy-holders by way of immediate bonuses, but in America the great majority of policies are issued on the condition that profits will accrue only if the life survive and if the policy be kept in force for the stipulated period. The effect of this condition is that when profits do vest, they are of course larger than if the policy-holders had received immediate bonuses. In former times not only were the profits placed in a Tontine, but the policies themselves were subject to a similar arrangement; so that unless the renewal premiums were punctually paid, the policies would lapse and the assured would derive no benefit from them.
In the British colonies life assurance has also developed in a marvellous manner; and, considering the relative populations, Great Britain is left far behind. The Australian colonies in particular are pre-eminent for the success of their insurance offices, the Australian Mutual Provident Society of Sydney being the largest, and giving perhaps the largest bonuses of any company in the world; this result being due in part to excellent management, but principally to the very high rate of interest which invested funds yield at the Antipodes. On 31st December 1896 the Australian Mutual Provident Society had on its books 128,996 policies assuring £40,623,903, at annual premiums of £1,332,715, and the invested funds amounted to £13,728,540.
While in the Australian colonies insurance laws differ in various respects from those of the United Kingdom, yet they are still further removed from the regulations of the United States of America. There is no standard of solvency, and no government supervision in the ordinary sense of the word; but companies have to make returns somewhat on the British system, so that the public may have full information. In France, Germany, and Austria there are also large insurance companies.
National Insurance.—From an early period the British government has been accustomed to grant annuities on lives, the transactions being carried out by the National Debt Commissioners. The annuity business having been very large and very successful, it was naturally thought that an insurance business providing for sums payable at death might with equal propriety be undertaken, and consequently, through the medium of the post-office, a life-assurance office was started on the 17th April 1865, but in the magnitude of results it has not answered expectations. In the year 1889 the amount received in premiums was only £15,108, 7s. 2d., and the amount paid in claims £7473, 3s. 10d., and the total premium receipts from the opening of the office up to 31st December 1889 were only £226,069, 4s. 8d., being very much less than the revenue of many of the private offices for a single year. Probably the reason for this comparative failure of the British life-assurance department is that no efforts are made to develop the business, and no commission is paid to agents.
New Zealand has also initiated a system of national insurance, but there the practice of private companies has been followed, and with eminent success. Canvassers have been appointed, and commission paid to agents; with the result, that while the department was instituted only in 1874, yet in the year 1896 the premium income was £790,956, and at the close of that year the accumulated insurance fund amounted to no less than £2,591,342.
Germany is the only country which has attempted compulsory national insurance, and that on a large scale. The first bill was passed in 1883, and provided for the compulsory insurance of workmen against sickness. In 1884 a further act was passed providing compulsory insurance against accidents; and in 1889 a third bill became law under which the working-classes will on disablement from illness or accident, or on attaining old age, receive a pension. It cannot be said that the insurance laws of Germany are based upon strict actuarial science, but they are a bold attempt to solve a very difficult problem. In the United Kingdom there is perhaps not the same need for a compulsory insurance law of this drastic character, because the poor-law practically has the same end in view.