ON OFFICE VALUATIONS. 



The error diminishes as the age increases, as the 

 following table will show : 



APPENDIX THE SIXTH. 



ON A QUESTION CONNECTED WITH THE VALUATION OF 

 THE ASSETS OF AN INSURANCE OFFICE. 



IF an insurance office were ahout to close its doors, 

 and to buy up all the policies of its members, the pro- 

 cess of valuation would only require the assets to be ex- 

 pressed by the amount of money which they would 

 actually produce at the time of valuation. In this 

 case, the profit or surplus is properly expressed by 

 A + P C, or the amount of assets increased by the 

 present value of all the premiums, and diminished by 

 that of all the claims. 



But valuation is not usually made with reference to 

 an immediate settlement ; but for the purpose of ascer- 

 taining what sum can be set apart as profit, and de- 

 clared to belong to existing policies, without anticipatory 

 injustice to future members. The preceding formula, 

 with allowance for expences of management, still repre- 

 sents the sum which may be called profit, provided that 

 the stock belonging to the office can really be improved at 

 the rate of interest assumed in the valuation. For the 

 sufficiency of this stock to answer all demands depends 

 upon its increasing at that rate of interest upon which 

 the values of P and C were found. 



