Leases for Lives
Life Contingent Contracts and the Emergence of Actuarial Science in Eighteenth-Century England

This work explains the underfunding of early insurance and annuity schemes, and proposes a new view of how actuarial science developed as a discipline.

David R. Bellhouse (Author)

9781107111769, Cambridge University Press

Hardback, published 14 July 2017

270 pages
23.5 x 15.7 x 2 cm, 0.54 kg

'Bellhouse (statistics, Univ. of Western Ontario) has produced a one-of-a-kind history of actuarial science in 18th-century England … All collections serving actuarial, history of science, and English history scholarship should have this informative, fascinating book. Summing Up: Recommended.' W. R. Lee, Choice

Many historians of insurance have commented on the disconnect between the rise of English life insurance companies in the early eighteenth century and the mathematics behind the sound pricing of life insurance products that was developed at about the same time. Insurance and annuity promoters typically ignored this mathematical work. Bellhouse explores this issue, and shows that the early mathematical work was not motivated by insurance but instead by the fair valuation of life contingent contracts related to property. Even the work of the mathematician James Dodson in the creation of the Equitable Life Assurance Society, offering sound actuarially based premiums, did not change the industry in any significant way. The tipping point was a crisis in 1770 in which the philosopher and mathematician Richard Price, as well as other mathematicians, showed that a dozen or more recently formed annuity societies could not meet their financial obligations and were inviable.

Preface
1. Introduction
2. Mathematics and property in the seventeenth century
3. Edmond Halley's life table
4. Halley's impact or lack of it
5. De Moivre and his early influence
6. Mathematicians as consultants
7. Mathematicians and early life insurance companies
8. The annuity bubble of the 1760s and 70s
9. The after shocks of the bubble on life annuities
10. Developments in the life insurance industry in the later eighteenth century
11. A return to roots
12. Conclusion
Appendix I. Technical appendix
Appendix II. Life tables
Endnotes
Bibliography
Index.

Subject Areas: History of science [PDX], Impact of science & technology on society [PDR], History of mathematics [PBX], Insurance & actuarial studies [KFFN], Econometrics [KCH]