Loss Models: From Data to Decisions, 2nd edition

Actuaries focusing on health insurance and casualty insurance are also interested in modeling (and forecasting) deaths, but these actuaries deal even more with other types of losses that have more widely varying frequencies and severities. These areas of practice, and the emerging area of enterprise risk management, are concerned with losses that have so-called long-tail distributions. Such distributions are characterized by large claims that are infrequent but sufficiently severe that they can’t be ignored in rate-setting and reserving.