Fundamental Concepts of Actuarial Science – Charles L.Trowbridge

Charles L.Trowbridge – Fundamental Concepts of Actuarial Science

Introduction Purpose: The purpose of this monograph is the identification and the delineation of the fundamental intellectual concepts upon which actuarial science is based. These concepts are relatively few in number, and may be well understood by the actuaries who employ them; but the actuarial profession has not previously organized these concepts into a cohesive whole. Through the Actuarial Standards Board, and a similar effort in Canada, North American actuaries are currently engaged in the development of actuarial standards, guides to the performance of a wide range of actuarial tasks. A related effort is the development of actuarial principles, recently undertaken by the Casualty Actuarial Society and the Society of Actuaries.

The profession seems to be moving toward a three-tier structure. The first level is composed of the fundamental concepts at which this monograph is aimed, and the third the standards toward which the overall effort is eventually directed. The second level includes the principles that actuaries employ, as they apply fundamental concepts to practical problems.

Principles may be more specific to one kind of actuarial endeavor, and may place more emphasis on methodology, than fundamental concepts, though there may well be considerable overlap. This monograph leaves the development of standards to the Actuarial Standards Board, the definition and statement of actuarial principles to the committees on actuarial principles, and concentrates on fundamental concepts or foundations…

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