Obituary of Teivo Pentikäinen
(ASTIN Bulletin, 2006, Volume 36, Number 2).
Pentikäinen died on 12 June 2006, aged 88. We have lost one
of our great thinkers and a very devoted actuary who saw his
role as standing up to defend basic principles and moral
values whenever necessary. His career as an actuary was of
the highest distinction, as well in administration and
industry as in academics.
was born in 1917 in Vyborg, then in Finland but nowadays in
Russian territory. After the war service he graduated from
the University of Helsinki in mathematics and he completed
his Ph.D. thesis on additivity properties of algebraic
function systems in 1947. During his whole carrier he taught
at the University of Helsinki. He received an Honorary
Professorship in 1977.
He was chief director in 1948 through 1962 of
the insurance department of the Finnish Ministry of Social
Affairs and Health (the body responsible for the insurance
supervision and drafting legislation on both private and
social insurance). He became the President and CEO (Chief
Executive Officer) of the newly established pension
insurance company Ilmarinen in 1962. He developed the
company to become the biggest in the Finnish market. He
retired from Ilmarinen in 1977.
is known as the Father of the Finnish statutory
earnings-related pension scheme, established in 1962 and run
by private pension insurance companies and pension funds. He
chaired the committee on whose work the legislation was
based. His role in getting the social partners and
politicians to agree on the scheme was decisive.
He also chaired the committee which made a
total reform of the Insurance Company Act in 1952 with a new
solvency system based on modern risk theoretical thinking
and with marked practical consequences such as creation of
the Equalization Provision System and reduction of the costs
of outgoing reinsurance as a consequence of the improved
risk-carrying capacity of the companies.
He was also the primus motor in a major
reform of the Finnish motor liability insurance and workers'
compensation insurance at the beginning of the 1960's. The
reforms meant introduction of strict liability, abolishment
of ceilings on compensation paid for bodily injuries, and a
complete overhaul of the actuarial bases applied to the two
Pentikäinen was one of the greatest contributors to the
Theory of Solvency in the second half of the 20th century.
He did pioneering work with respect to the scientific
foundations for the establishment of the solvency needed,
and the optimal size and form of reinsurance already in the
At the beginning of the 1980's, the Finnish
Ministry of Social Affairs and Health requested him to make
a study on solvency of non-life insurance companies. He had
developed a number of techniques based on simulating
techniques in the meantime. He carried out his assignment
together with many others. The publication appeared in 1982
and is entitled Solvency of Insurers and Equalization
Reserves. The book received Clarence Kulp memorial award
1984 for the best risk theory book, granted by the American
Risk and Insurance Association. The Finnish solvency
requirements were fully reformed on the basis of that work.
Furthermore, he significantly contributed to
the research on Risk Theory. With his many publications in
international journals over 45 years he had a great
influence on the work of many actuaries. He was the
initiator and coauthor of the book Risk Theory, (London 1969
with R.E. Beard and E. Pesonen) and its renewed version,
Practical Risk Theory for Actuaries, (London 1994, with
C. Daykin and M. Pesonen).
was an active ASTIN member. He was among the ASTIN founders
in 1957 and he contributed actively to ASTIN colloquia and
the Astin Bulletin until the most recent years.
received numerous awards recognizing and honoring his
achievements both nationally and internationally. He was an
honorary fellow of the Institute of Actuaries and the
Actuarial Society of Finland.
Even while retired, Pentikäinen participated in the public
debate about the insurance sector through his books,
lectures, evaluations, and writings. He was an unyielding,
at times even brisk, defender of the insurance ideology.
Good readiness for this was provided by his broad knowledge
which extended also to the details, continuous following of
international developments, and top-notch capability of
Pentikäinen's sharp-witted humour and quick intellect may
have scared the unaccustomed other party to the discussion,
but maybe precisely because of these characteristics he had
a broad and faithful group of friends. In addition to these
friends, also his family members and other close relatives
mourn his passing.