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I’ve always had a deep fascination with maths, and recently, thanks to my retirement and the freedom of time it’s given me, I’ve been conducting a bit of “self-educating” on the topic of actuarial science. During this process, I discovered a little-known but fascinating historical character named John Graunt.
He was a 17th-century cloth seller from London who had a very strange hobby. Before starting his workday, he liked to study the Bills of Mortality, which were weekly records compiled by parish clerks, detailing births, deaths, and their causes.
Over time, he started to compare causes of death with age and gender. His first key insight was noticing that although more males were born in London, the actual adult gender ratio was roughly balanced because of lower female mortality rates. This act of statistical inference—of looking for trends in what seemed like random data—is what makes him the father of demography and a pioneer of actuarial science.
Graunt’s work didn’t stop there. He created one of the first life tables, a revolutionary concept that used his mortality data to estimate survival rates to a certain age. This innovation was the direct ancestor of modern actuarial tables, which insurance companies use to calculate premiums. He was the first to scientifically show that longevity and death followed predictable patterns within a population—a foundational idea that was entirely new at the time.
This little-known person established the very foundations of the discipline that directly impacts your Social Security and the baseline income you build your retirement from. Alongside this, the very systems used to price your insurance policies to give you peace of mind evolved. Next time your Social Security deposit hits your bank account or you’re glad for insurance after an accident, maybe tip your hat to the pioneering work of John Graunt and his odd little hobby.
The sad irony of his life is that although he developed the tools and ideas that applied not only to actuarial science but also the same principles that were co-opted by the developing insurance industry, it was sadly too late for him. The misfortune of the Great Fire of London destroyed his house and livelihood, making Graunt a victim of a risk that his own work would help others mitigate just a few short years later, leading him to a life of poverty before his death.
Thanks, Mark, for another reason to be grateful for our present life.
If we ever need proof of how connected we’ve always been, just look at the history of math – Hindu, Muslim, Arab, and European minds all building on each other. Take algebra for example. It was founded by Al-Khwarizmi in 9th-century Baghdad (the Chinese mathematicians knew algebra before 200 BCE but did not share until the 16th century CE). His seminal works were translated into Latin and introduced to Europe in the 12th century. The Latinized form of his name, “Algoritmi”, gave rise to the term “algorithm”.
Then, in 1202, at the age of 32, Leonardo da Pisa (not to be confused with any other Leonardo), better known as Fibonacci, applied these numerical methods and algorithms for merchants to do practical math using Hindu-Arabic numerals. Traders cheered; scholars scoffed at abandoning Roman numerals; and investors, ever fond of zeros, never looked back. Beyond popularizing Hindu-Arabic numerals and positional notation, he introduced the West to concepts such present value analysis, interest rate calculations, and the natural scientific applications of Fibonacci sequence.
“We are like dwarfs perched on the shoulders of giants.” Bernard of Chartres, a 12th century philosopher.
Mark, thanks for an interesting story. When my division was sold to a Private Equity firm in 2010, I made it a point to become better educated on our pension. In 2014, when they froze our traditional pension in favor of a cash balance plan with a new lump sum option, I had a lot more to learn. Luckily I knew a couple of actuaries who helped me understand the new plan, new rules, new options, and some of the nuances of joint and survivor calculations. They are a smart group of folks.
I think it’s an even more direct tie to the data science that curates your internet searches and likely led you to the Humble Dollar!
That’s interesting Mark. I always gave credit to Lloyd’s of London for the creation of the insurance industry, never giving any thought to the origins of the life tables.
I suspect that it takes a special kind of nerd to appreciate the effort you put into preparing this post. This nerd thanks you.
I was going to call myself a nerd during the intro to the article but thought better of it 😁
There’s a fine line between nerd and geek.
Thanks – I’ve learnt something new today. Wonder what he would make of today’s big data and how that is used for good and (increasingly) for ill.
I never rest totally easy with any insurance due to the idea that increasingly it seems plausible for loss adjusters to find ways to ding you using the data swamp. Not exactly the same thing but only today I saw that car rental agencies are using AI scanners to find minor scuffs etc to bill customers for.