Chapter 3
Bayesian Philosophy
Benedict Escoto
AON Benfield Chicago, Illinois, United States
Arthur Charpentier
Universite du Quebec a Montreal Montreal, Quebec, Canada
3.1 Introduction
Bayesian philosophy has a long history in actuarial science, even if it was sometimes hidden. Liu et al. (1996) claim that “Statistical methods with a Bayesian flavor [...] have long been used in the insurance industry.” And according to McGrayne (2012), actuaries and Arthur L. Bailey played an important rule to prove that it might be relevant to have prior opinions about the next experiment, not to say credible.
“[Arthur] Bailey spent his first year in New York [in 1918] trying to prove to himself that 'all of the fancy actuarial [Bayesian] procedures of the casualty ...
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