Both life and casualty actuaries may become
involved in evaluating contracts of Accident and Sickness in which the
duration of disability or of a hospital stay is a form of indeterminate loss.
If all forms of insurance reimbursed the claimant or policyholder without
any restriction, then a study of partial losses would involve only a study of
the distribution of losses, and, in particular. the average value of losses.
that is. severity. However. virtually every contract of insurance modifies
or limits the benefit or amount of recovery thereunder, as seen in the
following section.