The introduction of high-speed electronic computers has opened the way for analyses of motor insurance risk statistics on a scale not previously possible. We may regard the purpose of the analyses which form the subject of this note as being to test the validity of the existing rating structure by finding out how the claims experience varies from one rating cell to another within that structure; and, more generally, to explore the possibility of devising a more efficient rating structure by defining new levels within the existing factors, or by using new factors in addition to, or in replacement of, those already used.To achieve this purpose it is appropriate to consider on the one hand a detailed investigation of the experience over a limited period, analogous to that carried out when constructing a new standard life table and, on the other hand, a system for keeping the emerging experience under more or less continuous review. For this second aspect it is natural to think in terms of making comparisons between the actual experience and that expected according to the standard table.

Electronic computers have been available commercially for about 20 years. Actuarial interest was soon shown, but although a number of papers have appeared over the years there has been little recent discussion of how computers can best serve the profession.Many actuaries have little computing experience. To them it may appear a daunting task to learn to use a computer, because many instruction manuals seem, at first sight, extensive and complex. Our principal aim is to demonstrate to them that given suitable permanent facilities it is quite easy to use a computer for actuarial calculations, however complex these may be. We suggest that the complexity of most existing actuarial programming systems is unnecessary, and may have impeded the understanding of the computer's potential by actuaries.

No abstract

A Report with the above title, which forms Section B of this paper, was presented at the conference at Hythe, Kent in September 1977 of the General Insurance Study Group, which is sponsored jointly by the Institute and the Faculty. The conference was attended by about sixty people, nearly all non-life practitioners and nearly all actuaries.Previous papers on technical reserves had discussed various statistical methods of estimating outstanding claim reserves, and in some cases had included some data to provide numerical examples of the use of the methods. In our report we chose tostartwith some data and to look at the degree of stability in those data. Inspection of the data showed remarkably stable patterns and it was apparent that a simple method not previously described based on average payments was likely to be satisfactory for estimating the reserve for outstanding claims. The report then seeks to explain why the authors consider that this method has advantages over two well-known but more complicated methods.