When does ruin occur in the collective theory of risk?

In the discussion on the practical applicability of the collective theory of risk to the insurance field some points have been raised, where it is argued that the conceptions of the theory do not correspond to the conditions prevailing in practice, thus entailing a serious reduction of its working value. Three such points will be considered in this paper. They are usually put forward as follows: 1. The theory assumes constancy in time to hold for the distribution of the amounts at risk falling due, the risk sums.2. The theory does not take into account that interest is earned on the safeguarding capital of the insurer, the risk reserve.3. The theory considers the probability that ruin will ever occur to the insurer by exhaustion of the risk reserve. A fairly large part of this probability might be ascribable to the possibility of ruin in a very remote future, whilst the practical insurer is only interested in the probability within a reasonable period of time.