The Role of the Actuary
The actuary work done by Mr. Craig in the 1880’s was largely concerned with the actuarial administration of the industrial Department and with continuous checking of the company’s financial position. It was particularly important to keep watch over the company’s mortality experience among industrial policyholders. Inasmuch as no recognized mortality standards were available for this class of insured people, the original premium rates were based on the American Experience Table, commonly used for ordinary policies.
Through Mr. Craig’s foresight, the margin provided for expenses and contingencies in the computation of the original premiums was more than enough to absorb the higher mortality prevailing among the industrial population. By 1886 the financial problems on industrial business had been worked out and a surplus began to accumulate.
Within five years the Metropolitan was in such excellent financial condition that it was able to undertake important new ventures and began considering offering home insurance quotes, cheap homeowner insurance, and even maternity coverage. However, first came a broadening of the scope of industrial insurance, and then followed the company’s reentry into the ordinary field.
All through the crucial early years the only industrial policies issued were whole life contracts. Now the company was ready to issue industrial insurance on other plans, which combined opportunities for saving as well as protection. The actuary had to prepare new schedules of values appropriate to these policies.
On January 1, 1892, new tables of benefits for industrial endowment policies of varied durations were ready for the field force. In the next few years many contracts were liberalized and provided larger benefits. The actuary assumed great responsibilities in helping to revitalize the ordinary department. In order to compete successfully in this branch of the business against the older companies, most of which were still selling high premium policies on the strength of glowing promises of future dividends, the company had to offer something better to the public.
The solution was to issue simply worded and low priced nonparticipating contracts which the man on the street could afford. This meant the actuary had the difficult problem of determining the lowest premium rates which the company could safely charge on more than 15 different policy plans, including whole life and limited life and endowment policies of various terms.
These policies contained very liberal provisions for that era, such as paid up values after three years and no restrictions on travel or residence. Women were accepted, although the payment of an extra premium was required on some plans. Additional consideration was placed on offering maternity coverage, private health insurance, and even home insurance quotes. The succeeding years were again exceptionally busy ones for the actuary.
The Metropolitan added several new branches to its business. In 1896 it brought out its intermediate policies, necessitating the computation of new premium rates and non-forfeiture values for the various plans of insurance issued in this branch. This again was a distinctly new venture, as the mortality to be expected among these policyholders was unknown.
population. By 1886 the financial problems on industrial business had been worked out and a surplus began to accumulate.
Within five years the Metropolitan was in such excellent financial condition that it was able to undertake important new ventures and began considering offering home insurance quotes, cheap homeowner insurance, and even maternity coverage. However, first came a broadening of the scope of industrial insurance, and then followed the company’s reentry into the ordinary field.
All through the crucial early years the only industrial policies issued were whole life contracts. Now the company was ready to issue industrial insurance on other plans, which combined opportunities for saving as well as protection. The actuary had to prepare new schedules of values appropriate to these policies.
On January 1, 1892, new tables of benefits for industrial endowment policies of varied durations were ready for the field force. In the next few years many contracts were liberalized and provided larger benefits. The actuary assumed great responsibilities in helping to revitalize the ordinary department. In order to compete successfully in this branch of the business against the older companies, most of which were still selling high premium policies on the strength of glowing promises of future dividends, the company had to offer something better to the public.
The solution was to issue simply worded and low priced nonparticipating contracts which the man on the street could afford. This meant the actuary had the difficult problem of determining the lowest premium rates which the company could safely charge on more than 15 different policy plans, including whole life and limited life and endowment policies of various terms.
These policies contained very liberal provisions for that era, such as paid up values after three years and no restrictions on travel or residence. Women were accepted, although the payment of an extra premium was required on some plans. Additional consideration was placed on offering maternity coverage, private health insurance, and even home insurance quotes. The succeeding years were again exceptionally busy ones for the actuary.
The Metropolitan added several new branches to its business. In 1896 it brought out its intermediate policies, necessitating the computation of new premium rates and non-forfeiture values for the various plans of insurance issued in this branch. This again was a distinctly new venture, as the mortality to be expected among these policyholders was unknown.
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