Accident and Health Insurance from an Actuarial Viewpoint

Certain losses, the incident of which are unforeseen, do or may, sooner or later, fall to the lot of the individuals comprising any group of men. The chief function of insurance is to distribute these losses among all the members of the group so that no great strain will be borne by any individual. Of late insurance has further increased its usefulness in an attempt to reduce the losses sustained by the group, as evidenced by the accident prevention work of the casualty companies, the life extension work of the life companies and the fire prevention work of the fire companies. Yet the chief function of insurance still lies in the proper distribution of the losses among the various members of a group as they occur. There are two fundamental principles to be observed in the distribution of these losses. It is quite necessary First, that hi each case an actual financial loss be sustained. Second, that the losses incurred distributed among homogeneous groups.