Some Aspects of a Fall in the Rate of Mortality as Affecting the Liabilities of a Friendly Society

Synopsis of paper

The Paper draws attention to the loss arising on the sickness funds of Friendly Societies as a result of the steady fall in the rate of mortality amongst the general population in recent years. To set against this loss there are possible sources of profit such as a gain from favourable rates of sickness actually experienced or from excess rates of interest earned ; and if a Society grants a funeral benefit in addition to sickness benefit (as is commonly the case) the gain from light mortality under the former will help to offset the loss from light mortality under the latter. The relative periods of full and reduced benefits and the limiting age up to which sickness benefit is payable (whether granted throughout life or restricted to members below a certain age) are also of importance when the question of mortality loss is under consideration.

Notwithstanding the period that has elapsed and the improvement in mortality that has taken place since the date of publication of the tables based upon the experience of the Manchester Unity of Oddfellows during the years 1893-97, these tables are still employed as the standard tables for much Friendly Society work. The object of the Paper is to consider how the loss arising from certain assumed reductions in the rate of mortality may be set against gains from other sources, so that standard reserves may be set up without profit or loss accruing.