An Historical Viewpoint on Insurability

On 3 June 2010, I posted my translation of Geoffrey Clark’s paper “An Historical Viewpoint on Insurability” to the Iraq Insurance Review blog (here is the link: http://misbahkamal.blogspot.com/2010/06/historical-viewpoint-on-insurability.html).

Dr Kamil Al-Adhadh read the translation and wrote a short commentary, in the form of an email message, on the translated paper, addressed to me and to Professor Clark. In publishing Dr Al-Adhadh’s edited commentary, I hope that others will be encouraged to contribute to the discussion.

Dr Al-Adhadh is an economist with special expertise in economic statistics. He worked for the UN Economic & Social Commission for Western Asia (ESCWA)

Misbah Kamal

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Dear Misbah

Thank you very much for the reply. It was strange how the text of my previous reply disappeared! Anyway, I will try rewriting my commentary. Of course, I want to thank you for your competent and impartial translation of Professor Geoffrey Clark’s excellent article on the historical development of INSURABILITY. I enjoyed reading the article in its Arabic text, which was very interesting in the first place.

Apart from its historical underpinnings, the article, to my mind, is also suggestive, implicitly if not explicitly. The idea as developed, eventually, towards adopting statistical probabilities to estimate risks of insured life and non-life events can still be refined and developed further through the incorporation of socio-economic and occupational factors, in addition to some environmental and geographical circumstances that have an impact on loss making events.

Depending only on general life expectations, as derived from life tables (mortality tables), may not minimize errors in the measurement of life risks. Similarly, other socio-economic and geographical factors may play an important role in estimating the risks of insuring non-life events. To deploy these factors one needs, of course, a much wider data base. I think this tendency in insurance research has been recognised through the so-called certainty studies in economics that follow in the track of natural sciences and making use of risk models and actuarial tools. Regrettably, insurance research in the Arab world is poor and insurance as an economic concept hardly catches the attention of Arab economists. Arab insurance and reinsurance companies themselves hardly employ actuaries to examine their portfolios and place their underwriting on a scientific footing.

I thank you again for your excellent translation and I do hope that it would help imparting knowledge to a wide Arabic audience, interested in the insurance industry. Our sincere thanks are also due to Professor Clark for this interesting contribution.

Finally, may I suggest that a more fitting translation of the Arabic word:التأمينية is the word: الإستئمانية. Also, I would suggest using the words: جدول توتنتاين للوفاة instead of: التوتنتاين الموتي for mortuary tontine. I am making this modest suggestion knowing fully well that the concepts underlying these words are not common in Arabic. Collective discussion and writing in Arabic on the history and practice of insurance would, I believe, contribute to stabilising the idiomatic expressions of such concepts in Arabic.

Best wishes.

Kamil Al-Adhadh

Beirut 4 June 2010