1 00:00:01,320 --> 00:00:04,280 Speaker 1: Welcome to Stuff You Missed in History Class, a production 2 00:00:04,400 --> 00:00:14,040 Speaker 1: of iHeartRadio. Hello, and welcome to the podcast. I'm Holly 3 00:00:14,080 --> 00:00:17,959 Speaker 1: Frye and I'm Tracy B. Wilson, and we are continuing 4 00:00:17,960 --> 00:00:21,799 Speaker 1: our discussion of actuarial science and insurance. And if you 5 00:00:21,920 --> 00:00:25,520 Speaker 1: didn't listen to part one, go back and do that. 6 00:00:25,680 --> 00:00:28,920 Speaker 1: This is part two. We're jumping in right where we 7 00:00:29,000 --> 00:00:32,880 Speaker 1: left off in the story that includes actuarial science, assurance 8 00:00:32,880 --> 00:00:36,519 Speaker 1: and insurance. We define what assurance versus insurance means at 9 00:00:36,520 --> 00:00:39,320 Speaker 1: the top of part one, so you'll want that information. 10 00:00:39,920 --> 00:00:43,160 Speaker 1: When we left off, we had just discussed the Society 11 00:00:43,280 --> 00:00:46,000 Speaker 1: of Assurance for Widows and Orphans, which formed in sixteen 12 00:00:46,080 --> 00:00:48,840 Speaker 1: ninety nine to ensure that a person's next of kin 13 00:00:48,960 --> 00:00:52,559 Speaker 1: had a financial cushion when the family breadwinner died. And 14 00:00:52,600 --> 00:00:55,640 Speaker 1: today we're going to talk about another assurance society and 15 00:00:55,680 --> 00:00:59,639 Speaker 1: the various problems that both insurance and assurance companies ran 16 00:00:59,680 --> 00:01:03,200 Speaker 1: into in the eighteenth and nineteenth centuries, as well as 17 00:01:03,240 --> 00:01:07,280 Speaker 1: a look at gambling. In seventeen oh six, the Amicable 18 00:01:07,360 --> 00:01:11,080 Speaker 1: Society for a Perpetual Assurance Office was founded, and this 19 00:01:11,280 --> 00:01:15,520 Speaker 1: is often called the first life insurance company, although technically 20 00:01:15,600 --> 00:01:21,160 Speaker 1: it was assurance and not insurance. As with the society 21 00:01:21,200 --> 00:01:24,039 Speaker 1: that we mentioned at the end of Monday's episode. Membership 22 00:01:24,080 --> 00:01:27,600 Speaker 1: to the society was also capped at two thousand. Members 23 00:01:27,640 --> 00:01:31,120 Speaker 1: paid six pounds four pence each year, and at the 24 00:01:31,120 --> 00:01:33,840 Speaker 1: close of each year, money that had been collected was 25 00:01:33,920 --> 00:01:36,880 Speaker 1: split among the next of kin of any members who 26 00:01:37,000 --> 00:01:41,040 Speaker 1: had died that year. If no one had died, or 27 00:01:41,120 --> 00:01:44,040 Speaker 1: if very few people had died, the funds could be 28 00:01:44,319 --> 00:01:48,800 Speaker 1: unencumbered to pay out annuities to members or for investment 29 00:01:48,880 --> 00:01:55,840 Speaker 1: by the society. Those investments included malt tallies, mine venture bonds, 30 00:01:56,240 --> 00:02:01,840 Speaker 1: hollow sword blade bonds, and lottery tickets yes, lottery tip. 31 00:02:05,000 --> 00:02:07,680 Speaker 1: There was an age requirement that was based in part 32 00:02:07,720 --> 00:02:10,959 Speaker 1: on Hallie's tables. Members had to be between the ages 33 00:02:11,000 --> 00:02:14,280 Speaker 1: of twelve and forty five to minimize the risk of 34 00:02:14,320 --> 00:02:18,560 Speaker 1: too many members dying in any given year. That would 35 00:02:18,560 --> 00:02:20,679 Speaker 1: of course drop the payout amounts at the end of 36 00:02:20,720 --> 00:02:22,520 Speaker 1: the year, and it would leave the group with far 37 00:02:22,639 --> 00:02:27,800 Speaker 1: fewer contributors into the following year. Yeah, in case you 38 00:02:27,840 --> 00:02:30,760 Speaker 1: didn't recall, this is different from the assurance society we 39 00:02:30,840 --> 00:02:33,359 Speaker 1: talked about at the end of part one, where they 40 00:02:33,360 --> 00:02:37,320 Speaker 1: had to pay an amount every time someone died. Everyone 41 00:02:37,440 --> 00:02:41,519 Speaker 1: chipped in a set amount to create their payout, whereas 42 00:02:41,600 --> 00:02:44,200 Speaker 1: in this case you paid a flat fee every year 43 00:02:44,680 --> 00:02:47,720 Speaker 1: and that pool of money was then used to make payouts. 44 00:02:48,400 --> 00:02:52,120 Speaker 1: So set up a little bit differently. Things were evolving, Yeah, 45 00:02:52,440 --> 00:02:55,200 Speaker 1: try to find the best way. It reminds me a 46 00:02:55,240 --> 00:02:57,480 Speaker 1: little bit of some of the mutual aid societies that 47 00:02:57,760 --> 00:03:01,079 Speaker 1: numbers on the show before that some times would run 48 00:03:01,120 --> 00:03:05,440 Speaker 1: into trouble with just being financially insolvent as their membership 49 00:03:05,480 --> 00:03:10,400 Speaker 1: base aged over the years. Yep, we'll talk a little 50 00:03:10,400 --> 00:03:13,080 Speaker 1: bit about similar things happening here in a bit. But 51 00:03:13,160 --> 00:03:17,200 Speaker 1: in seventeen fifty six James Dodson created the first table 52 00:03:17,320 --> 00:03:21,320 Speaker 1: of annual assurance premiums and that used the Edmund Hallie 53 00:03:21,400 --> 00:03:24,040 Speaker 1: table that we talked about in Part one as a foundation. 54 00:03:25,040 --> 00:03:28,359 Speaker 1: Dodson was born in seventeen ten and became a mathematician, 55 00:03:28,600 --> 00:03:30,359 Speaker 1: and at the age of forty he wrote a book 56 00:03:30,400 --> 00:03:34,240 Speaker 1: titled The Accountant or The Method of Bookkeeping, and this 57 00:03:34,320 --> 00:03:37,600 Speaker 1: laid out how various businesses might model their account keeping 58 00:03:37,640 --> 00:03:40,640 Speaker 1: to know at all times what their debts and profits were, 59 00:03:41,000 --> 00:03:44,840 Speaker 1: as well as how future expenditures and income might play out, 60 00:03:45,080 --> 00:03:48,000 Speaker 1: and these were not theoretical models. It was like a workbook. 61 00:03:48,040 --> 00:03:52,040 Speaker 1: He laid out, for example, how exactly a shoemaker should 62 00:03:52,040 --> 00:03:54,640 Speaker 1: set up their books, with lists of raw materials that 63 00:03:54,760 --> 00:03:58,040 Speaker 1: might be part of that industry to include in their expenses, 64 00:03:58,560 --> 00:04:02,000 Speaker 1: calculations they should make for retail space, etc. It really 65 00:04:02,080 --> 00:04:04,960 Speaker 1: was a how to manual, and when he prepared his 66 00:04:05,040 --> 00:04:09,040 Speaker 1: table of premiums, he was motivated by frustration at having 67 00:04:09,080 --> 00:04:12,840 Speaker 1: been excluded from the Amicable Society as they did not 68 00:04:13,080 --> 00:04:16,159 Speaker 1: admit anyone over the age of forty five, and he 69 00:04:16,320 --> 00:04:19,600 Speaker 1: was forty six at this time. There is also a 70 00:04:19,720 --> 00:04:22,160 Speaker 1: version of this story that he was actually asked by 71 00:04:22,200 --> 00:04:25,080 Speaker 1: other people who were interested in forming a new society 72 00:04:25,520 --> 00:04:28,200 Speaker 1: to do this, but we do know that there was 73 00:04:28,240 --> 00:04:32,680 Speaker 1: this age issue. So he envisioned, with this new data set, 74 00:04:33,120 --> 00:04:35,720 Speaker 1: a new insurance company that could use more up to 75 00:04:35,800 --> 00:04:40,200 Speaker 1: date information to create more inclusive insurance options, and his 76 00:04:40,320 --> 00:04:43,080 Speaker 1: table was a way to modernize Hollie's data for the 77 00:04:43,120 --> 00:04:46,640 Speaker 1: mid eighteenth century, and just as he had laid out 78 00:04:46,680 --> 00:04:49,479 Speaker 1: how to's on setting up various other businesses in his 79 00:04:49,600 --> 00:04:53,560 Speaker 1: earlier writing, he wrote out what was essentially a guidebook 80 00:04:53,600 --> 00:04:57,240 Speaker 1: for insurance companies, including the principles of a good business 81 00:04:57,400 --> 00:05:01,680 Speaker 1: and ways to be both equitable and profit. In the 82 00:05:01,720 --> 00:05:05,760 Speaker 1: documents he prepared for the more comprehensive assurance operation, he 83 00:05:05,880 --> 00:05:10,200 Speaker 1: included the following four tables. A table of decrements wherein 84 00:05:10,240 --> 00:05:13,000 Speaker 1: the hazard of life is esteemed to be as great 85 00:05:13,080 --> 00:05:15,960 Speaker 1: as any author has conceived it to be, or as 86 00:05:16,040 --> 00:05:20,159 Speaker 1: can be deduced for many bills of mortality hitherto made public. 87 00:05:20,839 --> 00:05:23,719 Speaker 1: A table of the present values of annuities of one 88 00:05:23,760 --> 00:05:27,440 Speaker 1: pound each for single lives, computed at three percent compound 89 00:05:27,480 --> 00:05:31,919 Speaker 1: interest from the beforegoing principles. A table of premiums payable 90 00:05:32,000 --> 00:05:34,800 Speaker 1: for ensuring at one payment one hundred pounds on a 91 00:05:34,839 --> 00:05:38,159 Speaker 1: life of a given age, deduced from the preceding table 92 00:05:38,279 --> 00:05:42,680 Speaker 1: of the values of annuities on lives. A table of 93 00:05:42,720 --> 00:05:46,120 Speaker 1: annual premiums payable for ensuring one hundred pounds during the 94 00:05:46,160 --> 00:05:49,560 Speaker 1: whole continuance of a single life of any of the 95 00:05:49,600 --> 00:05:54,400 Speaker 1: following ages, according to the beforegoing principles. Dotson died at 96 00:05:54,400 --> 00:05:56,880 Speaker 1: the age of forty seven, seven months after his work 97 00:05:57,000 --> 00:05:59,680 Speaker 1: was used to petition the Privy Council for a charter 98 00:05:59,760 --> 00:06:02,719 Speaker 1: for a new company. So that seems kind of like 99 00:06:02,760 --> 00:06:05,760 Speaker 1: a cruel twist of fate. Yeah, So just to clarify 100 00:06:06,080 --> 00:06:09,279 Speaker 1: in case any of that didn't make obvious to you, 101 00:06:09,560 --> 00:06:14,200 Speaker 1: he was basically going, okay, but what if we included 102 00:06:14,240 --> 00:06:16,479 Speaker 1: people that are older than forty five, but they just 103 00:06:16,520 --> 00:06:19,039 Speaker 1: have to pay a different amount, Like they pay in 104 00:06:19,080 --> 00:06:21,000 Speaker 1: a little bit more because we know there's greater risk. 105 00:06:21,080 --> 00:06:23,240 Speaker 1: Like he was the first one who really laid out 106 00:06:23,240 --> 00:06:26,600 Speaker 1: how that might all work. The first mutual insurance company 107 00:06:26,680 --> 00:06:31,160 Speaker 1: was the Society for Equitable Assurances on Lives and Survivorship. 108 00:06:31,760 --> 00:06:35,120 Speaker 1: That company was established in London in seventeen sixty two 109 00:06:35,279 --> 00:06:38,560 Speaker 1: by Edward Rowe Moores, who had known Dodson and had 110 00:06:38,680 --> 00:06:42,520 Speaker 1: literally picked up where Dodson had left off. Two hundred 111 00:06:42,560 --> 00:06:46,440 Speaker 1: years later, Dodson was still invoked by actuaries when speaking 112 00:06:46,480 --> 00:06:50,240 Speaker 1: of his contribution. Ah Rowle, writing for the Journal of 113 00:06:50,279 --> 00:06:53,880 Speaker 1: the Institute of Actuaries in nineteen sixty two, states quote 114 00:06:54,120 --> 00:06:56,560 Speaker 1: life assurance was born in the middle of the period 115 00:06:56,640 --> 00:07:00,680 Speaker 1: seventeen forty to seventeen eighty. Johnson's England came when it 116 00:07:00,720 --> 00:07:05,040 Speaker 1: did because the climate was favorable. England was prosperous. The 117 00:07:05,040 --> 00:07:08,480 Speaker 1: mathematics of life contingencies was at hand, and there was 118 00:07:08,520 --> 00:07:12,320 Speaker 1: an unsatisfied demand for the protection that life assurance can give. 119 00:07:13,200 --> 00:07:16,160 Speaker 1: It also came when it did because one man, James 120 00:07:16,200 --> 00:07:21,120 Speaker 1: Dodson FRS, was determined that it should largely responsible as 121 00:07:21,160 --> 00:07:24,560 Speaker 1: he was, for the availability of the necessary mathematics. He 122 00:07:24,640 --> 00:07:28,440 Speaker 1: also realized fully the benefits that life assurance could confirm. 123 00:07:29,000 --> 00:07:32,240 Speaker 1: He conceived the vision of a mutual life assurance society 124 00:07:32,400 --> 00:07:36,280 Speaker 1: conducted on scientific lines, and was all in all the 125 00:07:36,360 --> 00:07:41,000 Speaker 1: ideal architect of the equitable to be. Morris is often 126 00:07:41,040 --> 00:07:44,040 Speaker 1: cited as the first person to assign the title of 127 00:07:44,240 --> 00:07:47,360 Speaker 1: actuary to the work that he and others were doing. 128 00:07:48,000 --> 00:07:51,680 Speaker 1: Was described by an actuary historian as having quote exceptional 129 00:07:51,760 --> 00:07:56,080 Speaker 1: ability in academic studies, yet with a quarrelsome temper. He 130 00:07:56,160 --> 00:07:59,120 Speaker 1: probably needed to have some fight because setting up a 131 00:07:59,160 --> 00:08:01,600 Speaker 1: new sort of businessiness was a lot of work, and 132 00:08:01,720 --> 00:08:05,080 Speaker 1: both the establishing process in the early days of explaining 133 00:08:05,320 --> 00:08:10,600 Speaker 1: how the whole operation worked to clients was arduous. He 134 00:08:10,640 --> 00:08:13,520 Speaker 1: received his master's degree at the Merchant Taylor's School at 135 00:08:13,600 --> 00:08:17,600 Speaker 1: Queen's College, Oxford in seventeen fifty three. He was very smart, 136 00:08:17,720 --> 00:08:20,120 Speaker 1: with a broad range of knowledge, and was considered to 137 00:08:20,120 --> 00:08:24,000 Speaker 1: be an eccentric. We don't know really why he started 138 00:08:24,120 --> 00:08:27,320 Speaker 1: using the word actuary for the work that was being 139 00:08:27,360 --> 00:08:30,920 Speaker 1: done in the field of assurance calculation. It's chalked up 140 00:08:30,920 --> 00:08:34,040 Speaker 1: in some accounts as possibly just being a word he 141 00:08:34,120 --> 00:08:38,680 Speaker 1: plucked from history because of his eccentricity. Yeah, we'll talk 142 00:08:38,720 --> 00:08:41,640 Speaker 1: a little bit about his eccentricity on behind the scenes, 143 00:08:41,679 --> 00:08:46,320 Speaker 1: because he's a pretty interesting figure. But regarding the use 144 00:08:46,400 --> 00:08:49,920 Speaker 1: of the title of actuary, M. E. Augborn, Joint Actuary 145 00:08:49,960 --> 00:08:53,480 Speaker 1: of the Equitable Life Assurance Society, wrote in the Journal 146 00:08:53,480 --> 00:08:56,520 Speaker 1: of the Institute of Actuaries in nineteen fifty six about 147 00:08:56,559 --> 00:09:00,199 Speaker 1: Moores's claim to the term, opening with actuary, it is 148 00:09:00,240 --> 00:09:02,880 Speaker 1: a curious word by which to describe the profession to 149 00:09:02,920 --> 00:09:06,520 Speaker 1: which it has become attached. There is no obvious connection 150 00:09:06,679 --> 00:09:09,080 Speaker 1: between the meaning of the word and the professional duties 151 00:09:09,080 --> 00:09:13,000 Speaker 1: which it signifies. Moreover, the title of actuary is still 152 00:09:13,040 --> 00:09:15,680 Speaker 1: in use for other officials who may buy their duties. 153 00:09:15,840 --> 00:09:17,920 Speaker 1: Have a more direct claim to the title from its 154 00:09:17,960 --> 00:09:22,560 Speaker 1: original derivation. The Latin word actuarius is the word that 155 00:09:22,760 --> 00:09:26,960 Speaker 1: actuary is derived from. In Latin, this could be assigned 156 00:09:27,000 --> 00:09:31,559 Speaker 1: to various jobs, including wage disbursement as a borrow word. 157 00:09:31,640 --> 00:09:35,559 Speaker 1: Actuary in the English language referred to registrars or clerks, 158 00:09:35,760 --> 00:09:38,920 Speaker 1: or to secretaries or accountants who kept a company's books, 159 00:09:39,679 --> 00:09:43,240 Speaker 1: But then, thanks to Mores's use of the word, it 160 00:09:43,280 --> 00:09:45,960 Speaker 1: also came to mean an insurance official who used to 161 00:09:46,240 --> 00:09:50,960 Speaker 1: statistical tables to calculate premiums or manage financial risks. But 162 00:09:51,040 --> 00:09:53,839 Speaker 1: Mores included the list of duties he thought the actuary 163 00:09:53,880 --> 00:09:58,200 Speaker 1: of the company should perform in the Equitable Society's formation paperwork, 164 00:09:58,679 --> 00:10:02,640 Speaker 1: and it included things that were not just calculations of tables. 165 00:10:03,240 --> 00:10:06,320 Speaker 1: The actuary was expected to go to work each day 166 00:10:06,320 --> 00:10:10,440 Speaker 1: except Sunday, write and keep the books, enter the applications 167 00:10:10,440 --> 00:10:13,840 Speaker 1: for membership and all transactions into a daily journal, and 168 00:10:14,080 --> 00:10:17,480 Speaker 1: enter the minutes of the society's meetings. People of a 169 00:10:17,640 --> 00:10:21,559 Speaker 1: higher rank were actually the ones responsible for the decisions 170 00:10:22,040 --> 00:10:25,560 Speaker 1: regarding finance numbers. Yeah, so it's not quite the role 171 00:10:25,600 --> 00:10:28,280 Speaker 1: of actuary as we see it now. So next we're 172 00:10:28,280 --> 00:10:30,800 Speaker 1: gonna jump to Wales and talk about a man who 173 00:10:30,920 --> 00:10:33,560 Speaker 1: redefined what that role was to be more like what 174 00:10:33,600 --> 00:10:37,000 Speaker 1: we would think today. But before we talk about William Morgan, 175 00:10:37,160 --> 00:10:49,560 Speaker 1: we're gonna pause for a sponsor break. William Morgan was 176 00:10:49,559 --> 00:10:53,480 Speaker 1: born on May twenty sixth, seventeen fifty in Newcastle, Glamorgan, Wales. 177 00:10:54,080 --> 00:10:56,280 Speaker 1: It's believed that his birth date is based on the 178 00:10:56,320 --> 00:10:59,120 Speaker 1: Julian calendar, as other records show his date of birth 179 00:10:59,120 --> 00:11:02,040 Speaker 1: as June sixth. That was likely the date after the 180 00:11:02,080 --> 00:11:05,200 Speaker 1: Gregorian calendar was adopted, which happened just two years after 181 00:11:05,240 --> 00:11:09,280 Speaker 1: he was born. His father, also named William Morgan, was 182 00:11:09,320 --> 00:11:12,640 Speaker 1: a physician and an apothecary, and his mother was Sarah 183 00:11:12,679 --> 00:11:16,120 Speaker 1: Price Morgan. The Morgan's had eight children. William was the 184 00:11:16,160 --> 00:11:19,360 Speaker 1: third and the first son, and his father decided that 185 00:11:19,480 --> 00:11:23,160 Speaker 1: he should also go into medicine. There's a gap in 186 00:11:23,200 --> 00:11:27,160 Speaker 1: the records regarding William's early schooling. The Dictionary of Welsh 187 00:11:27,160 --> 00:11:30,240 Speaker 1: Biography notes that there aren't records of his attendance at 188 00:11:30,280 --> 00:11:33,960 Speaker 1: the Cowbridge Grammar School, although his brother George is listed 189 00:11:34,000 --> 00:11:36,880 Speaker 1: as a student, but it seems likely that William also 190 00:11:37,120 --> 00:11:40,400 Speaker 1: attended the school is mentioned by him in his writings. 191 00:11:40,840 --> 00:11:44,199 Speaker 1: William was not it seems entirely sure about the plan 192 00:11:44,280 --> 00:11:46,640 Speaker 1: for him to become a doctor, but he left home 193 00:11:46,679 --> 00:11:50,199 Speaker 1: at nineteen to go to London for medical study. His 194 00:11:50,240 --> 00:11:54,120 Speaker 1: first apprenticeship with an apothecary, appears to have ended in 195 00:11:54,200 --> 00:11:57,840 Speaker 1: some kind of physical altercation with his boss, at which 196 00:11:57,880 --> 00:12:01,000 Speaker 1: point his uncle on his mother's side, Richard Price, helped 197 00:12:01,040 --> 00:12:05,360 Speaker 1: him get a second apprenticeship. During this same period, Richard 198 00:12:05,400 --> 00:12:10,200 Speaker 1: Price published the book Observations on Reversionary Payments that was 199 00:12:10,240 --> 00:12:14,720 Speaker 1: in seventeen seventy one. Price's book established systems and formulas 200 00:12:14,720 --> 00:12:18,679 Speaker 1: that laid out how annuities could work for pensioners and widows. 201 00:12:19,840 --> 00:12:22,760 Speaker 1: Not long after Price released the book, his brother in 202 00:12:22,840 --> 00:12:26,480 Speaker 1: law and William Morgan's father died, and this meant that 203 00:12:26,559 --> 00:12:30,000 Speaker 1: even though William was still technically a medical student, he 204 00:12:30,080 --> 00:12:31,920 Speaker 1: had to go home to Wales to try to keep 205 00:12:31,960 --> 00:12:35,560 Speaker 1: his father's medical practice running. This did not go well 206 00:12:35,600 --> 00:12:40,120 Speaker 1: at all. I saw one write up that suggested he 207 00:12:40,280 --> 00:12:43,800 Speaker 1: was too young and people didn't trust him. He also 208 00:12:43,920 --> 00:12:46,600 Speaker 1: may have had a mild physical deformity that made people 209 00:12:46,679 --> 00:12:50,000 Speaker 1: think he was not capable of being a doctor, which 210 00:12:50,000 --> 00:12:52,480 Speaker 1: is beloney. But it just did not work out. He 211 00:12:52,559 --> 00:12:54,880 Speaker 1: was not going to have a career in medicine. So 212 00:12:54,880 --> 00:12:56,920 Speaker 1: soon he went back to London and he asked his 213 00:12:57,040 --> 00:13:01,360 Speaker 1: uncle Richard Price for advice, and Price reportedly asked William 214 00:13:01,480 --> 00:13:04,240 Speaker 1: if he knew anything about math, and William told him 215 00:13:04,280 --> 00:13:06,640 Speaker 1: that he did not, but he sure would be happy 216 00:13:06,679 --> 00:13:09,559 Speaker 1: to learn. So Price, who was working at this point 217 00:13:09,559 --> 00:13:13,480 Speaker 1: with the Society for Equitable Assurances, found his nephew a 218 00:13:13,520 --> 00:13:16,760 Speaker 1: low level job there. In less than two years into 219 00:13:16,760 --> 00:13:19,320 Speaker 1: his time with the company, then twenty five year old 220 00:13:19,360 --> 00:13:22,960 Speaker 1: William became its actuary and he served in that role 221 00:13:23,000 --> 00:13:27,000 Speaker 1: for more than fifty years. This is an important moment 222 00:13:27,200 --> 00:13:32,440 Speaker 1: in actuarial history because William, working with his uncle, refined 223 00:13:32,559 --> 00:13:36,520 Speaker 1: actuary science in significant ways. Richard Price published a data 224 00:13:36,520 --> 00:13:40,680 Speaker 1: set called the Northampton Table in seventeen eighty. It used 225 00:13:40,679 --> 00:13:43,320 Speaker 1: a long term study of the parish of Northampton to 226 00:13:43,400 --> 00:13:47,960 Speaker 1: assemble detailed mortality statistics. The table included more than four 227 00:13:48,000 --> 00:13:51,120 Speaker 1: decades of information, so it was pretty robust, and William 228 00:13:51,160 --> 00:13:54,839 Speaker 1: Morgan used this table to further refine the formulas that 229 00:13:54,880 --> 00:13:59,120 Speaker 1: were used in calculating premiums. He wrote two papers on 230 00:13:59,160 --> 00:14:01,679 Speaker 1: the matter, both of which were presented by his uncle 231 00:14:01,720 --> 00:14:05,200 Speaker 1: to the Royal Society, and this resulted in William being 232 00:14:05,240 --> 00:14:09,480 Speaker 1: made a fellow there. William's entry into the actuary field 233 00:14:09,600 --> 00:14:12,440 Speaker 1: is recognized as important because he was able to advance 234 00:14:12,480 --> 00:14:15,160 Speaker 1: the mathematics of it to a point where the Equitable 235 00:14:15,200 --> 00:14:19,440 Speaker 1: Assurance Company flourished, and he advised other companies at a 236 00:14:19,480 --> 00:14:22,600 Speaker 1: time when many were still struggling to make policy payouts 237 00:14:22,600 --> 00:14:26,480 Speaker 1: and stay afloat. In eighteen oh six, the Amicable Society 238 00:14:26,560 --> 00:14:30,680 Speaker 1: reorganized and they adopted a graduated scale of premiums based 239 00:14:30,720 --> 00:14:34,520 Speaker 1: on Morgan's work. Though many other men were working on 240 00:14:34,560 --> 00:14:38,600 Speaker 1: these concepts before him, Morgan's contributions to the advancement of 241 00:14:38,600 --> 00:14:41,680 Speaker 1: his field were so significant that he's often called the 242 00:14:41,800 --> 00:14:45,160 Speaker 1: father of actuarial science, and he has often called the 243 00:14:45,200 --> 00:14:49,720 Speaker 1: first true actuary because of his valuable service to the company. 244 00:14:50,200 --> 00:14:53,200 Speaker 1: When he retired after fifty six years, he continued to 245 00:14:53,240 --> 00:14:57,360 Speaker 1: receive his full salary amount annually until his death. He 246 00:14:57,480 --> 00:15:00,840 Speaker 1: sometimes considered the first real actual wis in the sense 247 00:15:00,880 --> 00:15:03,080 Speaker 1: that we used the word today, because he had both 248 00:15:03,240 --> 00:15:07,280 Speaker 1: medical and mathematical expertise, and he could use those to 249 00:15:07,360 --> 00:15:11,440 Speaker 1: elevate the position of actuary beyond the more secretarial duties 250 00:15:11,520 --> 00:15:14,640 Speaker 1: that had initially been laid out for the position. He 251 00:15:14,680 --> 00:15:18,840 Speaker 1: could make and refine tables, really analyze liability from a 252 00:15:18,840 --> 00:15:24,040 Speaker 1: medical standpoint, and calculate premiums based on both. When William 253 00:15:24,040 --> 00:15:26,440 Speaker 1: Morgan was right in the middle of his career. A 254 00:15:26,440 --> 00:15:29,760 Speaker 1: man named Jacob Shoemaker opened the first actuary office in 255 00:15:29,760 --> 00:15:33,840 Speaker 1: North America. That was in Philadelphia, Pennsylvania, in eighteen oh nine, 256 00:15:34,320 --> 00:15:37,720 Speaker 1: and that was the Pennsylvania Company for Insurances on Lives 257 00:15:37,720 --> 00:15:41,920 Speaker 1: and Granting Annuities. By eighteen twenty three, Boston also had 258 00:15:41,920 --> 00:15:44,800 Speaker 1: a life insurance company, and in eighteen thirty so did 259 00:15:44,840 --> 00:15:49,280 Speaker 1: New York. The first mutual life insurance company in North America. 260 00:15:49,400 --> 00:15:52,840 Speaker 1: That's a company that's owned by its policyholders open in 261 00:15:52,880 --> 00:15:56,880 Speaker 1: the eighteen forties. Forming a society of actuaries in the 262 00:15:56,960 --> 00:15:59,960 Speaker 1: US was discussed for decades before it finally got off 263 00:16:00,200 --> 00:16:03,960 Speaker 1: the ground. The Actuarial Society of America was established in 264 00:16:04,040 --> 00:16:06,800 Speaker 1: eighteen eighty nine with just thirty eight members, and it 265 00:16:06,840 --> 00:16:12,920 Speaker 1: began publishing an actuarial periodical called Transactions. As actuary work 266 00:16:13,080 --> 00:16:16,280 Speaker 1: and insurance companies were growing in the US and Europe, 267 00:16:16,800 --> 00:16:21,000 Speaker 1: Britain experienced an event called the Insurance Controversy in eighteen 268 00:16:21,080 --> 00:16:25,200 Speaker 1: fifty two. A growing concern about the way insurance and 269 00:16:25,320 --> 00:16:28,800 Speaker 1: assurance companies were operating led to a call to the 270 00:16:28,800 --> 00:16:32,440 Speaker 1: Board of Trade to investigate, and it became apparent that 271 00:16:32,520 --> 00:16:34,760 Speaker 1: over the course of several years at the end of 272 00:16:34,800 --> 00:16:38,040 Speaker 1: the eighteen forties and into the eighteen fifties, a group 273 00:16:38,120 --> 00:16:42,400 Speaker 1: of new assurance associations had taken in seven hundred forty 274 00:16:42,400 --> 00:16:47,760 Speaker 1: five thousand and ten pounds, They had disbursed eighty seven thousand, 275 00:16:47,840 --> 00:16:51,080 Speaker 1: nine hundred and eighty nine pounds in claims and annuities, 276 00:16:51,440 --> 00:16:54,560 Speaker 1: and had spent two hundred eighty seven thousand, three hundred 277 00:16:54,640 --> 00:16:58,960 Speaker 1: thirty nine pounds on operating expenses. That meant they had 278 00:16:59,000 --> 00:17:01,440 Speaker 1: spent more than fifty fifty percent of the money they 279 00:17:01,480 --> 00:17:05,080 Speaker 1: had taken in, leaving a relatively small sum to invest 280 00:17:05,119 --> 00:17:08,359 Speaker 1: and to pay out as claims arose. That led to 281 00:17:08,400 --> 00:17:14,679 Speaker 1: accusations of ignorant business practices at best and corruption at worst. 282 00:17:15,240 --> 00:17:19,640 Speaker 1: Ys Tracy mentioned often these kinds of societies would start 283 00:17:19,640 --> 00:17:22,040 Speaker 1: to break down because the finances just didn't work out, 284 00:17:22,359 --> 00:17:24,480 Speaker 1: and like right out of the gate, they were spending 285 00:17:24,560 --> 00:17:26,919 Speaker 1: way more than they should be, and this led to 286 00:17:26,960 --> 00:17:30,719 Speaker 1: an examination of existing laws and calls for reform from 287 00:17:30,760 --> 00:17:35,200 Speaker 1: the Institute of Actuaries, including the recommendation that a person 288 00:17:35,280 --> 00:17:39,439 Speaker 1: had to pass examinations to become an actuary. You couldn't 289 00:17:39,480 --> 00:17:41,440 Speaker 1: just say I'm good at math. This is my job. 290 00:17:42,080 --> 00:17:45,119 Speaker 1: The Parliamentary committee that prepared an extensive report on the 291 00:17:45,160 --> 00:17:47,960 Speaker 1: matter noted that one big problem was that you couldn't 292 00:17:47,960 --> 00:17:51,639 Speaker 1: really legislate away fraud. It was already against the law 293 00:17:51,720 --> 00:17:54,600 Speaker 1: and swindlers were always going to try it, but that 294 00:17:54,720 --> 00:17:58,080 Speaker 1: a need for change was really recognized. The committee report 295 00:17:58,119 --> 00:18:01,640 Speaker 1: noted that the field of assurance operated very differently from 296 00:18:01,680 --> 00:18:05,520 Speaker 1: almost any other business, so trying to adapt existing business 297 00:18:05,600 --> 00:18:09,520 Speaker 1: law to it was obviously not working. The remainder of 298 00:18:09,520 --> 00:18:12,080 Speaker 1: the eighteen fifties were a time of new legislation and 299 00:18:12,160 --> 00:18:15,280 Speaker 1: efforts to head off abuses in the industry in the UK, 300 00:18:16,080 --> 00:18:18,920 Speaker 1: and one of those changes was that life assurance companies 301 00:18:18,960 --> 00:18:22,760 Speaker 1: were protected by a limited liability law, meaning members were 302 00:18:22,760 --> 00:18:25,560 Speaker 1: protected at new upfront how much they could lose if 303 00:18:25,600 --> 00:18:29,600 Speaker 1: things went completely wrong with the assurance association. In eighteen 304 00:18:29,680 --> 00:18:33,480 Speaker 1: sixty nine, the Institute of Actuaries published a new, more 305 00:18:33,520 --> 00:18:37,400 Speaker 1: accurate mortality table and that was considered far more accurate 306 00:18:37,440 --> 00:18:41,760 Speaker 1: and scientifically compiled than its predecessors. To collect data for it, 307 00:18:41,840 --> 00:18:46,280 Speaker 1: the Institute collected information from twenty British life assurance offices, 308 00:18:46,680 --> 00:18:48,800 Speaker 1: which included a total of one hundred and forty seven 309 00:18:48,880 --> 00:18:52,399 Speaker 1: thousand counted people who had health exams when they joined 310 00:18:52,480 --> 00:18:56,399 Speaker 1: assurance societies and were pronounced healthy. It tracked the number 311 00:18:56,440 --> 00:19:00,800 Speaker 1: of deaths within the group. The Institute published alongside this 312 00:19:00,920 --> 00:19:05,159 Speaker 1: table a monetary analysis of it. So we're going to 313 00:19:05,200 --> 00:19:07,840 Speaker 1: talk about some of the challenges that faced the actuarial 314 00:19:07,920 --> 00:19:12,320 Speaker 1: sciences and the insurance industry in the twentieth century, right 315 00:19:12,359 --> 00:19:14,080 Speaker 1: after we hear from some of the stuff you missed in 316 00:19:14,160 --> 00:19:27,439 Speaker 1: history classes sponsors. On September second, eighteen ninety five, the 317 00:19:27,520 --> 00:19:32,159 Speaker 1: first International Congress of Actuaries was held. Brussels, Belgium was 318 00:19:32,200 --> 00:19:34,800 Speaker 1: the host city, and many cities have hosted it over 319 00:19:34,840 --> 00:19:38,320 Speaker 1: the decades. It moves every time. It has convened at 320 00:19:38,440 --> 00:19:41,920 Speaker 1: roughly four year intervals ever since, the most recent having 321 00:19:41,920 --> 00:19:44,879 Speaker 1: been held in Sydney, Australia in twenty twenty three, and 322 00:19:44,960 --> 00:19:49,720 Speaker 1: September second remains International Actuaries Day. The organizing group was 323 00:19:49,800 --> 00:19:54,360 Speaker 1: named the Comitte Parmenent de Concreis dactua, or Standing Committee 324 00:19:54,400 --> 00:19:59,119 Speaker 1: of Actuarial Congresses. It was officially renamed the International Actuarial 325 00:19:59,160 --> 00:20:03,720 Speaker 1: Association in nineteen sixty eight. The early twentieth century was 326 00:20:03,720 --> 00:20:07,280 Speaker 1: a time of extreme challenge and growth for actuarial science. 327 00:20:08,119 --> 00:20:11,760 Speaker 1: There were suddenly a lot of new circumstances that changed 328 00:20:11,840 --> 00:20:15,840 Speaker 1: life expectancy, in some cases dramatically, in the course of 329 00:20:15,960 --> 00:20:20,000 Speaker 1: just a few decades. The airplane was invented. Maybe not 330 00:20:20,040 --> 00:20:23,439 Speaker 1: as big of an effect now, but early airplanes. Yes, 331 00:20:25,480 --> 00:20:29,359 Speaker 1: there were two World wars. There was an influenza epidemic, 332 00:20:29,720 --> 00:20:33,240 Speaker 1: the Great Depression, the beginning of the social security system 333 00:20:33,280 --> 00:20:36,359 Speaker 1: in the US, and advances in science and technology that 334 00:20:36,560 --> 00:20:40,800 Speaker 1: changed quality of life while also introducing new risks. At 335 00:20:40,840 --> 00:20:43,760 Speaker 1: the same time, an insurance shift that came from the 336 00:20:43,800 --> 00:20:48,000 Speaker 1: corporate sector had to be incorporated into actuarial science. As 337 00:20:48,080 --> 00:20:51,880 Speaker 1: companies started to offer group insurance to employees and pension 338 00:20:51,920 --> 00:20:55,840 Speaker 1: plans became both more common and more complex, All of 339 00:20:55,880 --> 00:20:58,880 Speaker 1: those benefits and their costs had to be accounted for 340 00:20:59,000 --> 00:21:02,359 Speaker 1: so that insurance companies could set their rates and know 341 00:21:02,520 --> 00:21:07,280 Speaker 1: both the risks and potential profitability of their plans. Also, 342 00:21:07,440 --> 00:21:10,960 Speaker 1: during the first half of the twentieth century, multiple professional 343 00:21:11,000 --> 00:21:15,359 Speaker 1: actuarial organizations formed in the US. This resulted in a 344 00:21:15,359 --> 00:21:17,919 Speaker 1: lot of cases where an actuary was a member of 345 00:21:18,080 --> 00:21:21,720 Speaker 1: multiple groups that essentially had the same purposes and goals, 346 00:21:21,880 --> 00:21:24,960 Speaker 1: and in nineteen forty nine, several of these groups merged 347 00:21:25,000 --> 00:21:29,760 Speaker 1: to form the Society of Actuaries, headquartered in Chicago. In 348 00:21:29,840 --> 00:21:32,919 Speaker 1: the time since then, of course, actuarial science has continued 349 00:21:32,920 --> 00:21:36,879 Speaker 1: to encountershifts that impact the way their work assesses things 350 00:21:37,040 --> 00:21:41,399 Speaker 1: like life expectancy. Additionally, the computer age has meant that 351 00:21:41,480 --> 00:21:45,960 Speaker 1: not only has computing power enabled great calculation capability and 352 00:21:46,040 --> 00:21:50,239 Speaker 1: machine generated tables, but it's also brought more variables with it, 353 00:21:50,359 --> 00:21:56,120 Speaker 1: so the work continues to evolve. I imationed that COVID 354 00:21:56,320 --> 00:22:00,000 Speaker 1: threw a big wrench into all of all of actuarial scie. 355 00:22:00,760 --> 00:22:06,520 Speaker 1: I remember seeing some threads that were about like actuarial 356 00:22:06,600 --> 00:22:11,439 Speaker 1: data that was tracking what was happening in terms of 357 00:22:11,520 --> 00:22:16,280 Speaker 1: like life expectancy and long COVID and all of that stuff. 358 00:22:17,280 --> 00:22:21,399 Speaker 1: And I'm saying that from memories, not something I could 359 00:22:21,760 --> 00:22:25,800 Speaker 1: suddenly call up without doing some more googling. Today, though, 360 00:22:26,440 --> 00:22:29,640 Speaker 1: becoming an actuary takes a while. In addition to schooling, 361 00:22:29,760 --> 00:22:33,639 Speaker 1: there are multiple exams and additional certifications that are pretty 362 00:22:33,640 --> 00:22:38,080 Speaker 1: important to career development and progression. That said, though, it's 363 00:22:38,119 --> 00:22:42,600 Speaker 1: a career that routinely appears on best jobs lists because 364 00:22:42,600 --> 00:22:45,919 Speaker 1: it remains in demand with a good salary range and 365 00:22:45,960 --> 00:22:50,160 Speaker 1: growth opportunities. US News and World Report ranks actuary as 366 00:22:50,240 --> 00:22:54,280 Speaker 1: number eight in Best Business Jobs, number thirteen in Best 367 00:22:54,320 --> 00:22:57,960 Speaker 1: stem jobs, and number twenty two in best paying jobs, 368 00:22:58,320 --> 00:23:02,720 Speaker 1: and number twenty seven in one hundred Best Jobs, with 369 00:23:02,800 --> 00:23:05,320 Speaker 1: a salary rating of eight point one out of ten 370 00:23:05,480 --> 00:23:11,719 Speaker 1: and above medium scores and growth stress and work life balance. Listen, 371 00:23:11,840 --> 00:23:13,920 Speaker 1: did I have a moment while doing this research where 372 00:23:13,920 --> 00:23:16,719 Speaker 1: I went, should I have become an actuary? Not that 373 00:23:17,000 --> 00:23:20,560 Speaker 1: my job isn't great, but like I don't know, it 374 00:23:20,600 --> 00:23:25,720 Speaker 1: doesn't show up on the top top one hundred lists. Yeah, 375 00:23:25,840 --> 00:23:28,720 Speaker 1: I'm not gonna lie. I had the same thing when 376 00:23:28,760 --> 00:23:31,119 Speaker 1: I read this paragraph, and then I thought about, you know, 377 00:23:31,280 --> 00:23:35,720 Speaker 1: my lifelong math struggle, right right, this is the trick 378 00:23:35,800 --> 00:23:39,920 Speaker 1: if only. The thing that we have not talked about 379 00:23:40,000 --> 00:23:42,560 Speaker 1: yet and I feel like is almost becoming the elephant 380 00:23:42,560 --> 00:23:46,359 Speaker 1: in the podcast room is the perception that insurance is 381 00:23:46,400 --> 00:23:49,800 Speaker 1: a form of gambling. But it is sometimes described that way, 382 00:23:50,359 --> 00:23:53,880 Speaker 1: and whether it is or isn't has been debated by 383 00:23:53,920 --> 00:23:57,600 Speaker 1: people for a very long time. Writing for the Connecticut 384 00:23:57,640 --> 00:24:00,879 Speaker 1: Insurance Law Journal in two thousand and eight, Timothy Auburn 385 00:24:01,000 --> 00:24:04,400 Speaker 1: opened his analysis of the matter with quote. More directly 386 00:24:04,480 --> 00:24:08,680 Speaker 1: than any other enterprise apart from slavery, life insurance set 387 00:24:08,680 --> 00:24:12,159 Speaker 1: a price on human life. As it evolved in Britain 388 00:24:12,240 --> 00:24:16,040 Speaker 1: during the nineteenth century, the insurance industry introduced a dizzying 389 00:24:16,119 --> 00:24:20,200 Speaker 1: number of variations on this theme. For the individual purchasing 390 00:24:20,200 --> 00:24:23,520 Speaker 1: an insurance policy, the value of life was translated into 391 00:24:23,560 --> 00:24:27,000 Speaker 1: the sum required to care for dependence, loss of access 392 00:24:27,040 --> 00:24:29,639 Speaker 1: to a wife's inheritance should she die before her father, 393 00:24:30,160 --> 00:24:32,439 Speaker 1: the sum lost to a creditor in the event of 394 00:24:32,560 --> 00:24:36,040 Speaker 1: death occurring prior to repayment, and the loss of livelihood 395 00:24:36,119 --> 00:24:38,800 Speaker 1: suffered by a tenant whose lease ended with the life 396 00:24:38,800 --> 00:24:42,639 Speaker 1: of a third party. All these reasons for buying insurance 397 00:24:42,760 --> 00:24:47,359 Speaker 1: established an equivalence between mortality and monetary value, a death 398 00:24:47,440 --> 00:24:51,720 Speaker 1: nexus that precisely and morbidly expressed the cash nexus derided 399 00:24:51,720 --> 00:24:55,399 Speaker 1: by Thomas Carlyle as the moral failing of British society. 400 00:24:56,400 --> 00:24:59,920 Speaker 1: Auburn also notes that quote, since nobody knew for certain 401 00:25:00,200 --> 00:25:03,320 Speaker 1: when they would die, a life insurance policy was also, 402 00:25:03,760 --> 00:25:07,480 Speaker 1: by definition a wager, and since wagers occupied a quite 403 00:25:07,480 --> 00:25:10,840 Speaker 1: different category, there was always at least a potential for 404 00:25:10,960 --> 00:25:13,439 Speaker 1: the Life office to take on the darker colors of 405 00:25:13,440 --> 00:25:16,520 Speaker 1: the gambling den. To be clear, in case you think 406 00:25:16,840 --> 00:25:19,679 Speaker 1: I'm saying he's saying something he isn't. Auburn is not 407 00:25:19,760 --> 00:25:22,479 Speaker 1: saying that insurance is gambling, but he's setting the stage 408 00:25:22,480 --> 00:25:26,000 Speaker 1: for the discussion of how Britain addressed this concern from 409 00:25:26,040 --> 00:25:30,280 Speaker 1: a legal perspective. In Part one, we mentioned the sixteen 410 00:25:30,400 --> 00:25:33,200 Speaker 1: ninety case in which a man named Thornborough took out 411 00:25:33,200 --> 00:25:35,680 Speaker 1: a policy on a man he was not related to 412 00:25:35,760 --> 00:25:39,640 Speaker 1: who was ill as an act of fraud. That kind 413 00:25:39,680 --> 00:25:42,800 Speaker 1: of thing started happening frequently, and over a few decades 414 00:25:42,840 --> 00:25:46,679 Speaker 1: it became tied to another rather callous sort of entertainment 415 00:25:46,760 --> 00:25:49,600 Speaker 1: that was popular in gentlemen's clubs in the eighteenth century, 416 00:25:49,640 --> 00:25:53,240 Speaker 1: and that was betting on the deaths of strangers. Taking 417 00:25:53,240 --> 00:25:55,679 Speaker 1: out life insurance policies was a way to get around 418 00:25:55,680 --> 00:25:59,000 Speaker 1: gambling laws. If a person held a policy on somebody, 419 00:25:59,040 --> 00:26:01,840 Speaker 1: it was defensible, at least per the letter of the law, 420 00:26:02,200 --> 00:26:05,440 Speaker 1: for them to speculate on when that person might die. 421 00:26:06,200 --> 00:26:08,840 Speaker 1: But in reality, the money spent on the policy was 422 00:26:08,880 --> 00:26:12,399 Speaker 1: often from a gambling pool. The betters would pay in 423 00:26:12,680 --> 00:26:15,800 Speaker 1: to cover the premium and each place a bet on 424 00:26:15,920 --> 00:26:19,800 Speaker 1: when the insured person would die, and then the winner 425 00:26:20,040 --> 00:26:23,320 Speaker 1: got the payout. It's so troubling to me that this 426 00:26:23,480 --> 00:26:27,440 Speaker 1: was an activity in clubs that were considered gentlemen's clubs, 427 00:26:27,440 --> 00:26:31,879 Speaker 1: because it's the least gentlemanly behavior I can imagine. But 428 00:26:32,000 --> 00:26:35,680 Speaker 1: to combat this grisly form of amusement and the insurance 429 00:26:35,680 --> 00:26:38,240 Speaker 1: fraud that was often hand in hand with it, Britain 430 00:26:38,320 --> 00:26:41,480 Speaker 1: passed the Life Assurance Act of seventeen seventy four. It 431 00:26:41,520 --> 00:26:44,560 Speaker 1: was also known as the Gambling Act, and the language 432 00:26:44,560 --> 00:26:46,800 Speaker 1: of that act stipulated that no one could hold a 433 00:26:46,840 --> 00:26:49,800 Speaker 1: policy on another person's life if they did not have 434 00:26:49,840 --> 00:26:53,160 Speaker 1: a legitimate interest in that person's life, and that all 435 00:26:53,240 --> 00:26:57,680 Speaker 1: life insurance policies had to include a list of beneficiaries' names. 436 00:26:58,520 --> 00:27:02,720 Speaker 1: It also forbid ensuring you couldn't, for example, take out 437 00:27:02,720 --> 00:27:05,120 Speaker 1: a policy on someone that was worth a great deal 438 00:27:05,200 --> 00:27:08,520 Speaker 1: more than they were worth financially. This was to deter 439 00:27:08,680 --> 00:27:11,040 Speaker 1: people from trying to get rich from the passing of 440 00:27:11,080 --> 00:27:15,359 Speaker 1: a family member through insurance. This act impacted insurance in 441 00:27:15,400 --> 00:27:19,040 Speaker 1: ways that it really didn't intend to. Its language was 442 00:27:19,160 --> 00:27:23,080 Speaker 1: ambiguous in some areas, and it enabled people to find loopholes, 443 00:27:23,560 --> 00:27:26,919 Speaker 1: there were instances where the difference between insuring people and 444 00:27:27,080 --> 00:27:31,960 Speaker 1: ensuring items got kind of fuzzy. Additionally, as insurance became 445 00:27:32,119 --> 00:27:35,639 Speaker 1: less exclusively in upper class luxury and something that the 446 00:27:35,680 --> 00:27:39,080 Speaker 1: working class also used, some of the provisions of the 447 00:27:39,160 --> 00:27:44,200 Speaker 1: Act excluded financial interests of beneficiaries that were actually completely reasonable. 448 00:27:44,880 --> 00:27:47,640 Speaker 1: One of the main reasons people took out life insurance 449 00:27:47,680 --> 00:27:51,920 Speaker 1: policies was so that their families wouldn't be unduly burdened 450 00:27:52,000 --> 00:27:54,840 Speaker 1: by the expense of a funeral at a time when 451 00:27:54,840 --> 00:27:58,520 Speaker 1: they were grieving. That's something people still use it for today, 452 00:27:58,640 --> 00:28:03,480 Speaker 1: but per the Gambling Act, burial was not an insurable interest, 453 00:28:04,240 --> 00:28:07,520 Speaker 1: but policies continued to be issued knowing that the money 454 00:28:07,520 --> 00:28:10,760 Speaker 1: would be used that way. Eventually, the law caught up 455 00:28:10,800 --> 00:28:13,840 Speaker 1: to reality with some amendments, but for a while insurers 456 00:28:13,880 --> 00:28:19,920 Speaker 1: were issuing policies that they knew were technically illegal. Yeah, 457 00:28:19,960 --> 00:28:22,080 Speaker 1: I didn't see this. I don't remember the statistic, but 458 00:28:22,119 --> 00:28:23,960 Speaker 1: I saw one that was like more than fifty percent 459 00:28:23,960 --> 00:28:27,680 Speaker 1: of policies could have technically been stricken because people knew 460 00:28:27,680 --> 00:28:30,960 Speaker 1: that's what they were being taken out for. This issue 461 00:28:31,000 --> 00:28:35,160 Speaker 1: of people thinking of insurance as gambling is not exactly settled. 462 00:28:35,400 --> 00:28:38,720 Speaker 1: There are plenty of fairly recent articles about it. In 463 00:28:38,760 --> 00:28:42,080 Speaker 1: twenty seventeen, a BBC News article written by Tim Harford 464 00:28:42,080 --> 00:28:46,000 Speaker 1: sums up the distinction this way. Legally and culturally, there 465 00:28:46,040 --> 00:28:50,400 Speaker 1: is a clear distinction between gambling and insurance. Economically, the 466 00:28:50,480 --> 00:28:54,000 Speaker 1: difference is less visible, and an article published in the 467 00:28:54,040 --> 00:28:58,480 Speaker 1: journal Gaming Law Review in Economics in twenty fourteen, gambling 468 00:28:58,600 --> 00:29:02,320 Speaker 1: law expert I nelsonsse noted that quote insurance is of 469 00:29:02,360 --> 00:29:07,240 Speaker 1: course gambling. Looking at just the required three elements, insurance 470 00:29:07,240 --> 00:29:11,280 Speaker 1: has consideration, prize, and chance. A policyholder puts up a 471 00:29:11,280 --> 00:29:14,160 Speaker 1: sum with the expectation of winning a larger sum if 472 00:29:14,200 --> 00:29:18,880 Speaker 1: a certain contingent future event occurs. Insurance meets the legal 473 00:29:18,920 --> 00:29:22,960 Speaker 1: definition of gambling. The big difference, according to Rose, is 474 00:29:22,960 --> 00:29:25,120 Speaker 1: that in the case of gambling, the gambler hopes the 475 00:29:25,120 --> 00:29:28,480 Speaker 1: payoff event will happen, and in the case of insurance, 476 00:29:28,960 --> 00:29:33,880 Speaker 1: the insured hopes it won't. Dune dun dumn. That's really 477 00:29:33,920 --> 00:29:37,560 Speaker 1: the big distinction, sort of. There are still people. I mean, 478 00:29:37,600 --> 00:29:41,000 Speaker 1: you'll find it literally anywhere. If you google is insurance 479 00:29:41,040 --> 00:29:43,200 Speaker 1: gambling on the Internet, you will find people on both 480 00:29:43,240 --> 00:29:46,560 Speaker 1: sides of that debate. That are very very adamant of 481 00:29:46,560 --> 00:29:54,280 Speaker 1: the correctness of their position. Anyway, that's our really very brief. 482 00:29:54,360 --> 00:29:58,960 Speaker 1: I feel like look at insurance, assurance and actuary science, 483 00:29:59,000 --> 00:30:04,800 Speaker 1: which I find quite fascinating. Now I have some fun 484 00:30:05,240 --> 00:30:08,840 Speaker 1: to me listener mail. Okay, this is from our listener Caroline. 485 00:30:09,000 --> 00:30:11,440 Speaker 1: He writes, Hi, Holly and Tracy Seasons, greetings in a 486 00:30:11,440 --> 00:30:14,280 Speaker 1: happy new year to you both from Harrow in England. 487 00:30:14,640 --> 00:30:17,600 Speaker 1: After listening to the seventeenth century roots of the metric system, 488 00:30:17,640 --> 00:30:19,480 Speaker 1: I thought I would write to tell you the effect 489 00:30:19,720 --> 00:30:22,240 Speaker 1: of growing up in England in the seventies and eighties 490 00:30:22,320 --> 00:30:25,880 Speaker 1: on the way I measure things. As mentioned in the podcast, 491 00:30:26,000 --> 00:30:28,520 Speaker 1: this was when schools in the UK started teaching the 492 00:30:28,520 --> 00:30:32,400 Speaker 1: metric system. However, the outside world was still very much imperial. 493 00:30:32,920 --> 00:30:35,160 Speaker 1: We have a little progress in using the metric system, 494 00:30:35,200 --> 00:30:37,680 Speaker 1: but it has stalled, leaving me and others as a 495 00:30:37,760 --> 00:30:40,600 Speaker 1: kind of hybrid. To give you some examples, when talking 496 00:30:40,600 --> 00:30:43,080 Speaker 1: about the weather, I only understand how hot it is 497 00:30:43,160 --> 00:30:45,760 Speaker 1: if the temperature is in celsius. But if taking a 498 00:30:45,840 --> 00:30:48,800 Speaker 1: child's temperature, I'm a nanny, I find it easier to 499 00:30:48,880 --> 00:30:51,040 Speaker 1: tell if they have a high fever. If I'm measuring 500 00:30:51,080 --> 00:30:55,360 Speaker 1: in fahrenheit. When measuring lengths, I can only use millimeter, centimeter, 501 00:30:55,480 --> 00:30:58,480 Speaker 1: and meter, but long distances need to be in miles. 502 00:30:58,880 --> 00:31:01,040 Speaker 1: I have no clue about what feet and yards, but 503 00:31:01,200 --> 00:31:04,680 Speaker 1: most people around my age do. When cooking or baking, 504 00:31:04,720 --> 00:31:07,520 Speaker 1: I can use both metric and imperial measurements for both 505 00:31:07,560 --> 00:31:11,600 Speaker 1: wet and dry ingredients. While having a stalled system change 506 00:31:11,720 --> 00:31:14,200 Speaker 1: may sound like it would be confusing, it actually seems 507 00:31:14,200 --> 00:31:16,800 Speaker 1: like it's the best for the moment. I suspect there 508 00:31:16,800 --> 00:31:19,000 Speaker 1: would be pandemonium if they tried to make a full 509 00:31:19,120 --> 00:31:21,920 Speaker 1: change all in one go. Thanks so much for your podcast. 510 00:31:21,960 --> 00:31:23,640 Speaker 1: I love the topics you talk about, and I always 511 00:31:23,680 --> 00:31:26,040 Speaker 1: learn something new. I also love the behind the scenes. 512 00:31:26,080 --> 00:31:29,400 Speaker 1: They're my favorite episodes. You both have amazing sounding lass, 513 00:31:29,400 --> 00:31:32,600 Speaker 1: which always makes me feel happy. Kind regards, Caroline, Caroline, 514 00:31:32,640 --> 00:31:36,600 Speaker 1: this is such a sweet email, but also this is wonderful. 515 00:31:38,320 --> 00:31:41,240 Speaker 1: I kind of love this idea of living in both, 516 00:31:41,320 --> 00:31:44,560 Speaker 1: but also I can see how it would become tricky 517 00:31:44,600 --> 00:31:47,400 Speaker 1: potentially when traveling, Like if you go to a country 518 00:31:47,440 --> 00:31:50,760 Speaker 1: that is all metric, how do you know if someone 519 00:31:50,880 --> 00:31:57,360 Speaker 1: is running a fever? I think that's thank goodness, is 520 00:31:57,400 --> 00:31:59,760 Speaker 1: what I will say. For smartphones because I'm whipping that 521 00:32:00,160 --> 00:32:03,080 Speaker 1: out to do calculations all the time. I remember when 522 00:32:03,120 --> 00:32:07,800 Speaker 1: we went to Italy, which was a trip that got 523 00:32:07,840 --> 00:32:10,960 Speaker 1: delayed several times because of COVID, and when we were 524 00:32:11,040 --> 00:32:16,800 Speaker 1: there there were rules about, you know, isolating if you 525 00:32:16,920 --> 00:32:22,320 Speaker 1: had symptoms and stuff, and I remember the like it 526 00:32:22,360 --> 00:32:27,240 Speaker 1: was a metric fever line, yes, and being like, oh, 527 00:32:27,280 --> 00:32:29,800 Speaker 1: this is good to know it's in metric. And then 528 00:32:29,800 --> 00:32:32,960 Speaker 1: I was like, wait a minute, my thermometer. It's not 529 00:32:33,440 --> 00:32:38,000 Speaker 1: it's not in celsius. It's in fahrenheit. Yeah. Yeah. I 530 00:32:38,680 --> 00:32:42,560 Speaker 1: on the flip of that, when the pandemic was really 531 00:32:42,640 --> 00:32:48,120 Speaker 1: like at its you know, early manifestation, when it was 532 00:32:48,120 --> 00:32:50,760 Speaker 1: a very panicky time, I realized I didn't have a 533 00:32:50,760 --> 00:32:54,040 Speaker 1: working thermometer, and I ordered one online, but of course 534 00:32:54,080 --> 00:32:56,320 Speaker 1: supplies were low because everybody was doing that, and the 535 00:32:56,320 --> 00:33:02,520 Speaker 1: only one I could get was Celsius. We now accidentally 536 00:33:02,560 --> 00:33:10,520 Speaker 1: have four because when COVID finally struck our household, Patrick 537 00:33:10,560 --> 00:33:12,440 Speaker 1: was trying to isolate in the attic and he had 538 00:33:12,440 --> 00:33:14,920 Speaker 1: one up there, and then I also got sick and 539 00:33:14,960 --> 00:33:17,440 Speaker 1: I was like, I can't go into the attic, it's 540 00:33:17,480 --> 00:33:21,320 Speaker 1: too far, and so I just ordered another one, and 541 00:33:21,360 --> 00:33:23,360 Speaker 1: then that became the one that I would just put 542 00:33:23,400 --> 00:33:29,400 Speaker 1: in the bag for when traveling, and then couldn't find 543 00:33:29,400 --> 00:33:33,080 Speaker 1: it in the bag. It was still in the bag, 544 00:33:33,120 --> 00:33:35,080 Speaker 1: it was just sort of like tucked in a weird place. 545 00:33:35,120 --> 00:33:37,040 Speaker 1: Since like, so I replaced it again and I'm like, 546 00:33:37,080 --> 00:33:40,680 Speaker 1: there's just there's just thermometers everywhere. Now, listen, there's no 547 00:33:40,720 --> 00:33:45,760 Speaker 1: problem with having lots of thermometers. One day, one day 548 00:33:46,360 --> 00:33:50,800 Speaker 1: I'll develop my ability to do these calculations in my head. Maybe, yeah, 549 00:33:50,840 --> 00:33:53,720 Speaker 1: maybe that'll be a twenty twenty five resolution. In the meantime, 550 00:33:53,760 --> 00:33:55,320 Speaker 1: if you would like to write us, you can do 551 00:33:55,400 --> 00:33:58,840 Speaker 1: so at History podcast at iHeartRadio dot com. You can 552 00:33:58,880 --> 00:34:01,360 Speaker 1: also find us on social media. Is Missed in History? 553 00:34:01,400 --> 00:34:03,280 Speaker 1: And if you would like to subscribe and have not 554 00:34:03,400 --> 00:34:05,800 Speaker 1: done so yet, that as easy as pie. You can 555 00:34:05,840 --> 00:34:08,160 Speaker 1: do it on the iHeartRadio app or anywhere you listen 556 00:34:08,239 --> 00:34:15,840 Speaker 1: to your favorite shows. Stuff you Missed in History Class 557 00:34:15,880 --> 00:34:19,879 Speaker 1: is a production of iHeartRadio. For more podcasts from iHeartRadio, 558 00:34:20,040 --> 00:34:23,640 Speaker 1: visit the iHeartRadio app, Apple Podcasts, or wherever you listen 559 00:34:23,680 --> 00:34:24,680 Speaker 1: to your favorite shows.