Loss Models: From Data to Decisions, 4th Edition

PREFACE

The preface to the first edition of this text explained our mission as follows:

This textbook is organized around the principle that much of actuarial science consists of the construction and analysis of mathematical models that describe the process by which funds flow into and out of an insurance system. An analysis of the entire system is beyond the scope of a single text, so we have concentrated our efforts on the loss process, that is, the outflow of cash due to the payment of benefits.

We have not assumed that the reader has any substantial knowledge of insurance systems. Insurance terms are defined when they are first used. In fact, most of the material could be disassociated from the insurance process altogether, and this book could be just another applied statistics text. What we have done is kept the examples focused on insurance, presented the material in the language and context of insurance, and tried to avoid getting into statistical methods that would have little use in actuarial practice.

We will not repeat the evolution of the text over the first three editions but will intead focus on the key changes in this edition. They are:

1. The curriculum committees of the Casualty Actuarial Society and the Society of Actuaries have made changes over time with regard to coverage on Exam 4/C. As a result, candidates preparing for this exam using previous editions might skip sections they knew were not required reading for the exam. This makes for an awkward presentation ...