Engineering, mathematics, actuarial science and chemistry

The first lecture on insurance mathematics (1858–1859)

The link between the Polytechnikum and the insurance industry can be dated with some precision. In the winter semester of 1858–1859 Professor Gustav Zeuner gave a lecture on the theory of insurance mathematics.¹ The date is significant. The Schweizerische Lebensversicherungs- und Rentenanstalt had been founded in Zurich in 1857 by Conrad Widmer with guarantees from the Schweizerische Kreditanstalt, and Escher himself had been closely involved in the new mutual life insurer.² A life insurer requires mortality tables, premium calculations and reserves computed with actuarial methods. The appearance of an insurance mathematics lecture at the Polytechnikum within two years of the Rentenanstalt's foundation shows how quickly the new school responded to the needs of the financial institutions emerging around it.

Zeuner's lecture should not be overstated. It was a single course given by an engineer with statistical interests, at a time when no professional training for actuaries existed anywhere in Switzerland. The early Swiss insurers recruited their mathematical staff from wherever they could find it, often from Germany. They nevertheless found in Zurich an environment in which mathematicians could be consulted and trained. The concentration of mathematical talent described above made the Polytechnikum the natural partner for insurers that needed to verify their tables, to develop new products and to defend their reserving methods before the public authorities.

Federal supervision and the emergence of an actuarial profession

The professionalisation of insurance mathematics in Switzerland followed the introduction of federal insurance supervision. The Confederation obtained the competence to supervise private insurance companies in the revised Federal Constitution of 1874 and exercised it through the federal law of 1885 on the supervision of private insurance undertakings, which created a federal insurance office.³ The office needed mathematicians who could examine the premium and reserve calculations of the companies. In 1891 Christian Moser became the first federal insurance mathematician, a post created at the request of the federal administration. In 1904 he succeeded his mentor Johann Jakob Kummer as director of the Federal Insurance Office. In 1915 Moser gave up his state post for a full professorship of mathematical and technical insurance science at the University of Bern, where he had taught since 1901 and built what became the most influential school of insurance mathematics in Switzerland, at least from the perspective of the social state.⁴

The actuarial profession acquired its own institution in 1905, when the Vereinigung schweizerischer Versicherungsmathematiker was founded. Moser was among its founding members. The association brought together representatives of social insurance and of the private insurance industry and became an important platform for exchange between mathematicians aligned with industry and those aligned with the state.⁵ The association exists today as the Swiss Association of Actuaries. It still traces its foundation to 1905, promotes actuarial mathematics and related fields such as financial mathematics, data science and enterprise risk management, and organises the examinations for the professional title of actuary.⁶

The Bernese origin of the professional school is a useful corrective to a purely Zurich-centred narrative. Actuarial science in Switzerland grew out of the needs of the federal supervisory authority in Bern as much as out of the needs of the Zurich insurers. Zurich's contribution lay in the combination of a large insurance industry, which after the foundation of the Swiss Reinsurance Company in 1863 and of the Zurich accident insurer in 1872 was concentrated in the city, with a mathematical school of international rank.⁷ In the twentieth century that combination produced the Zurich school of insurance mathematics at ETH, which in 1994 led to the foundation of RiskLab, an interdisciplinary research centre in the Department of Mathematics devoted to statistical modelling and quantitative risk management in insurance and finance. RiskLab now manages the actuarial education at ETH Zurich and describes the institution as the main provider of insurance mathematics education in Switzerland.⁸

The practitioner will note the continuity. A reinsurer in Zurich today that needs to model catastrophe risk, longevity risk or the solvency capital required under the Swiss Solvency Test recruits from a pool of mathematicians trained a short tram ride from its head office. The lecture of 1858–1859 is the remote beginning of that pool.

Chemistry and industry

Chemistry was one of the five specialist schools of 1855, organised in a chemical-technical division and a division of pharmacy.⁹ Its importance for the Swiss economy grew with the synthetic dye industry, which established itself mainly in Basel in the second half of the century and depended on chemists trained in organic synthesis. A chemistry building was opened on the Universitätsstrasse in 1886, followed by a physics building in 1890 and a machine laboratory in 1900.¹⁰ These buildings mark the transition from a teaching school to an institution in which laboratory research became central.

Georg Lunge, appointed professor of technical chemistry in 1876, embodied the connection between the laboratory and the factory. Before coming to Zurich he had worked as a chemist in several works in Germany and England. His treatises on coal tar and ammonia and on sulphuric acid and alkali became standard works of chemical technology. His analytical methods made him one of the highest authorities of his field.¹¹ In the following generation the chemistry department achieved an extraordinary record. Of four professors appointed between 1893 and 1929, three received the Nobel Prize in Chemistry for work done largely at ETH: Richard Willstätter, Richard Kuhn and Hermann Staudinger. Leopold Ruzicka and Vladimir Prelog, later Nobel laureates as well, spent decades at the school.¹²

Chemistry mattered to the financial centre through a longer chain of connections than mathematics, and its importance was considerable. The chemical and pharmaceutical industry became one of the pillars of Swiss exports and one of the largest issuers on the Swiss capital market. Its research-intensive business model generated patents and licences that required legal protection, financial valuation and, from the late twentieth century, venture financing. Much of that knowledge base had its origin in the chemical laboratories of the Polytechnikum.

Testing, standards and trust: the materials testing institute of 1880

A less celebrated institution illustrates a further aspect of the relationship between technical expertise and finance. In 1880 the Polytechnikum established a federal institute for the testing of building materials, the forerunner of today's Empa.¹³ The institute tested iron, steel, cement and stone and issued certificates on their strength. In an economy in which railways, bridges, dams and factories were financed by bonds and shares sold to the public, such certificates had economic value. They reduced the information asymmetry between the engineers who designed a structure and the investors who financed it. Independent technical testing was, in this sense, part of the infrastructure of trust on which the capital market depended, in the same way as audited accounts and published prospectuses.

Notes

1. RiskLab Switzerland, ETH Zurich, “Insurance Mathematics at ETH Zurich”, https://risklab.ethz.ch/education.html. The page describes this lecture as the earliest documented instruction in insurance mathematics at the institution. ↩
2. Wikipedia, “Swiss Life”, https://en.wikipedia.org/wiki/Swiss_Life. Cited for orientation. The history of the Rentenanstalt belongs to Part E of this book. ↩
3. Art. 34 para. 2 of the Federal Constitution of 1874, https://www.verfassungen.ch/verf74.htm (“Der Geschäftsbetrieb von Auswanderungsagenturen und von Privatunternehmungen im Gebiete des Versicherungswesens unterliegt der Aufsicht und Gesetzgebung des Bundes.”). HLS, Martin Körner and Bernard Degen, “Versicherungen”, version of 21.01.2014, https://hls-dhs-dss.ch/de/articles/014066/, which records that the Confederation enacted the first insurance supervision act in 1885 and names the Eidgenössisches Versicherungsamt (from 1978 Bundesamt für Privatversicherungen) as the supervisory authority. The history of insurance supervision is treated fully in Part E. ↩
4. Wikipedia (German), “Christian Moser (Mathematiker)”, https://de.wikipedia.org/wiki/Christian_Moser_(Mathematiker). Cited for orientation. ↩
5. Wikipedia (German), “Christian Moser (Mathematiker)”, https://de.wikipedia.org/wiki/Christian_Moser_(Mathematiker). The University of Bern records that Moser had founded the seminar for insurance science in 1901 and held its first session on 26 April 1902, and that the association was established in 1905 with his support: University of Bern, “Leben und Sterben – 100 Jahre später”, uniaktuell, 2016, https://www.uniaktuell.unibe.ch/2016/leben_und_sterben__100_jahre_spaeter/index_ger.html. ↩
6. Swiss Association of Actuaries (SAA), “Association”, https://www.actuaries.ch/en/association/association. ↩
7. HLS, Körner and Degen, “Versicherungen”, https://hls-dhs-dss.ch/de/articles/014066/, which records the foundation of the Schweizerische Rückversicherungs-Gesellschaft in Zurich in 1863 by insurance companies and major banks and the entry of the Versicherungs-Verein in Zürich into business in 1872. Both are treated in Part E. ↩
8. RiskLab Switzerland, ETH Zurich, “About us”, https://risklab.ethz.ch/about-us.html, and “Insurance Mathematics at ETH Zurich”, https://risklab.ethz.ch/education.html. The courses are taught by professors and by lecturers from industry, including reinsurers and insurers, and meet the requirements of the SAA and of the Actuarial Association of Europe. ↩
9. ETH Zurich, Department of Chemistry and Applied Biosciences, “History”, https://chab.ethz.ch/en/the-department/about-us/history.html. ↩
10. ETHistory 1855–2005, epoch summary “1855–1904”, https://www.ethistory.ethz.ch/besichtigungen/epochen/ETH05_epochen.pdf. ↩
11. Wikipedia, “Georg Lunge”, https://en.wikipedia.org/wiki/Georg_Lunge. Cited for orientation. Lunge’s retirement was marked by a jubilee in 1909. ↩
12. ETH Zurich, Department of Chemistry and Applied Biosciences, “History”, https://chab.ethz.ch/en/the-department/about-us/history.html. ↩
13. Peter Fleer and Hans Werner Tobler, “Eidgenössische Technische Hochschulen (ETH)”, HLS, version of 27 November 2012, https://hls-dhs-dss.ch/de/articles/010419/. ETHistory gives the name as “Eidg. Anstalt zur Prüfung von Baumaterialien”. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.