Development of theory thumb|right|alt=A table of numbers; the first page of the U.S. 2003 mortality table.|2003 U.S. mortality (life) table, Table 1, Page 1 During the 17th century, a more scientific basis for risk management was being developed. In 1662, a London draper named John Graunt showed that there were predictable patterns of longevity and death in a defined group, or cohort, of people, despite the uncertainty about the future longevity or mortality of any one individual. This study became the basis for the original life table. Combining this idea with that of compound interest and annuity valuation, it became possible to set up an insurance scheme to provide life insurance or pensions for a group of people, and to calculate with some degree of accuracy each member's necessary contributions to a common fund, assuming a fixed rate of interest. The first person to correctly calculate these values was Edmond Halley. In his work, Halley demonstrated a method of using his life table to calculate the premium someone of a given age should pay to purchase a life-annuity.
Development of theory thumb|right|alt=A table of numbers; the first page of the U.S. 2003 mortality table.|2003 U.S. mortality (life) table, Table 1, Page 1 During the 17th century, a more scientific basis for risk management was being developed. In 1662, a London draper named John Graunt showed that there were predictable patterns of longevity and death in a defined group, or cohort, of people, despite the uncertainty about the future longevity or mortality of any one individual. This study became the basis for the original life table. Combining this idea with that of compound interest and annuity valuation, it became possible to set up an insurance scheme to provide life insurance or pensions for a group of people, and to calculate with some degree of accuracy each member's necessary contributions to a common fund, assuming a fixed rate of interest. The first person to correctly calculate these values was Edmond Halley. In his work, Halley demonstrated a method of using his life table to calculate the premium someone of a given age should pay to purchase a life-annuity.