Preface

Summary

This book is on the theory, methods, and empirical implementation of nonlife actuarial models. It is intended for use as a textbook for senior undergraduates. Users are assumed to have done one or two one-semester courses on probability theory and statistical inference, including estimation and hypothesis testing. The coverage of this book includes all the topics found in Exam C of the Society of Actuaries (Exam 4 of the Casualty Actuarial Society) as per the 2007 Basic Education Catalog. In addition, it covers some topics (such as risk measures and ruin theory) beyond what is required by these exams, and may be used by actuarial students in general.

This book is divided into four parts: loss models, risk and ruin, credibility, and model construction and evaluation. An appendix on the review of statistics is provided for the benefit of students who require a quick summary. Students may read the appendix prior to the main text if they desire, or they may use the appendix as a reference when required. In order to be self contained, the appendix covers some of the topics developed in the main text.

Some features of this book should be mentioned. First, the concepts and theories introduced are illustrated by many practical examples. Some of these examples explain the theory through numerical applications, while others develop new results. Second, several chapters of the book include a section on numerical computation using Excel. Students are encouraged to use Excel to solve some of the numerical exercises.