On the Influence of Mathematics and Informatics on the Modern Insurance Industry

Abstract

The development of modern life assurance started in the year 1693 when Edmond Halley published the first mortality tables based on reliable empirical data. Since then, there has always been a direct and intimate relation between mathematics on the one hand and the insurance business — not restricted to personal insurance — on the other hand. In particular the models and methods of risk theory, developed in the 20th century and based on probability theory and mathematical statistics, have made it possible to describe substantial parts of the insurance business quantitatively, thus providing a sound basis for managerial decisions like premium calculation, reservation and the type and size of reinsurance. The emergence of informatics or computer science in the past two or three decades has influenced the insurance industry in two ways. On the one side, computers allow of complicated and large-scale numerical calculations. On the other side, the use of electronic data processing has revolutionized the administration of the whole insurance business.