Statistical and Probabilistic Methods in Actuarial Science

by Philip J. Boland

Statistical and Probabilistic Methods in Actuarial Science covers many of the diverse methods in applied probability and statistics for students aspiring to careers in insurance, actuarial science, and finance. The book builds on students’ existing knowledge of probability and statistics by establishing a solid and thorough understanding of these methods. It also emphasizes the wide variety of practical situations in insurance and actuarial science where these techniques may be used. Although some chapters are linked, several can be studied independently from the others. The first chapter introduces claims reserving via the deterministic chain ladder technique. The next few chapters survey loss distributions, risk models in a fixed period of time, and surplus processes, followed by an examination of credibility theory in which collateral and sample information are brought together to provide reasonable methods of estimation. In the subsequent chapter, experience rating via no claim discount schemes for motor insurance provides an interesting application of Markov chain methods. The final chapters discuss generalized linear models and decision and game theory. Developed by an author with many years of teaching experience, this text presents an accessible, sound foundation in both the theory and applications of actuarial science. It encourages students to use the statistical software package R to check examples and solve problems.

368 pages, Hardcover

First published March 5, 2007

Reviews

[William Schram · Rating 4 out of 5]

There are several jobs out there that are necessary but aren’t in vogue due to them being boring or low-key. One such job is that of the humble actuary. While they are essential to insurance and other such fields many people haven’t heard of actuarial science. This is the impression that I get, but it is possible that I just don’t pay attention to a lot of little things. I first heard about actuaries in passing when I was watching Kim Possible; that television show from the Disney Channel back in the early 2000s. Then one of my mathematics teachers gifted me with a booklet called the Preliminary Actuarial Exams. So, due to my infinite curiosity, I decided to buy an actual textbook that teaches the techniques of Actuarial Science.

So you might be wondering; what is an actuary? An actuary uses its mathematical chops to predict risk and price things accordingly. As such, it is beneficial for them to be able to read graphs and understand tables of data. This is especially true now. There are mountains of data and information out there that you have to make sense of.

Statistical and Probabilistic Methods in Actuarial Science is a textbook by Philip J Boland. It covers what it says it does. It uses Statistics and Probability to develop tools that are useful to an actuary. So there are a lot of charts, graphs, and tables in this book. It starts slow but goes into more advanced subjects soon enough. There are examples and workable problems with answers in the back of the book. The book has a total of 8 major chapters and 4 appendices. If you would like to read this book or study actuarial science, it would help to have some math under your belt. This book seems to be part of a series, so maybe I will find the other books in it and read those as well.