ABSTRACT
It seemed to us worthwhile to spend two lectures on particular forms of insurance contracts, because we now wish to try to see the wood for the trees by looking at the underlying principles common to all contracts considered so far. From a rather crowded literature one can mention Gerber [1979], p. 39, who treats profits emerging over time from a life insurance contract in a probabilistic setting; Neill [1989], ch. 4, which contains a comprehensive account of life insurance policy values or policy reserves and how their values move over time, from a traditional actuarial viewpoint, which essentially treats the empirical distribution function as the population distribution function; and Vaughan and Vaughan [2008], ch. 8, in which policy reserves in life insurance are put in the context of unearned premium reserves in general insurance, and the discussion takes place firmly in a North American context.
