Survey of Fuzzy Set Theory in Actuarial Life Modeling

Abstract

This thesis describes Actuarial science and Fuzzy Logic as relatively recent fields of mathematics introducing methods for containing uncertainty and vagueness in the line of business in which it is being used. Whereas actuaries work on the financial risk in (re)insurance of future events, ‘Fuzzicists’ aim at modeling the degree to which such events may occur. In the process of researching and writing, the author conducted a literature search and review of Fuzzy Set Theory with a structural approach to actuarial modeling. Following the recent development and discoveries of fuzzy logic, life insurance actuaries gained ultramodern modeling techniques, replacing the sole use of probabilities that had started to become insufficient. This thesis is slated to span the applications of Fuzzy Mathematics in the actuarial modeling of Life Contingencies.