Reliability Analysis Encyclopedia of Actuarial Science

In reliability analysis one is interested in studying the reliability of a technological system being small or large. As examples of small systems we have washing machines and cars, whereas tankers, oilrigs and nuclear power plants are examples of large systems, see marine insurance, nuclear risks. By the reliability of a system we will mean the probability that it functions as intended. It might be tacitly assumed that we consider the system only for a specified period of time (for instance one year) and under specified conditions (for instance disregarding war actions and sabotage). Furthermore, one has to make clear what is meant by functioning. For oilrigs and nuclear power plants it might be to avoid serious accidents, see accident insurance, such as a blow-out or a core-melt. It should be acknowledged that the relevance of reliability theory to insurance was pointed out by Straub [27] at the start of the seventies. In his paper he applies results and techniques from reliability theory to establish bounds for unknown loss 1