Actuarial Aspects of Long-Term Sickness Insurance

Abstract

The development of sickness insurance of the type dealt with in this paper has been a long process, commencing in a tentative fashion, probably a century ago, in Europe. In 1900, E. Hamza, at that time actuary of a Russian insurance company, contributed to the Third International Congress a paper of interesting historical significance which is clearly based on long experience in Germany. In his paper he developed an approach fundamentally different from the traditional British approach. British methods—which can be described with complete adequacy at this stage as a continuation of Friendly Society actuarial technique—have stood the test of time for at least 150 years and it is the purpose of this paper to analyse the two lines of development; to pose the question of their efficacy in the future; and to outline alternative methods depending on modern mathematical techniques.