|
The mathematical analysis or insurance professionals, who perform necessary calculations for setting insurance premium rates; Actuaries use skills in mathematics, economics, finance and statistics to study uncertain future events, especially those of concern to insurance companies, employee benefits such as medical insurance and pension plans, and social welfare programs such as social security and Medicare.
The classical and main functions of actuaries are to compute premiums for insurance and reserves. Reserves are similar to liabilities and indicate how much should be set aside now to provide for future payouts. If you inspect the balance sheet of an insurance company, you will find that the liability side consists mainly of reserves.
In some part of world, becoming a completely certified actuary requires passing a hard series of exams, which takes several years, much of it after college and while working. These make parallel with the two major branches of actuarial work. The first deals with life matters such as life insurance, annuities, pensions, disability and medical insurance. The second deals with property matters such as autos, homeowners, or commercial property insurance.
An actuary's job usually will involve quantifying how much a sum of money or financial liability will be worth at different points in the future. Since this is not a deterministic process, stochastic models are used to determine a distribution and the parameters of the distribution.
Recently the scope of the actuarial field has widened to include investment advice, and even asset management.
Typically Actuaries will be employed in insurance companies, consulting firms (i.e. firms that sell actuarial advice and analysis to other companies), or government departments.
Different duties are performed by actuaries depending on whether they work in insurance, finance, or employee benefits. Actuaries who work for insurance companies predict insurance risk by using statistics. They figure the odds of fires or other natural disasters occurring. They calculate death, accident, and unemployment rates. They also estimate the rates at which disabilities and retirements occur. Actuaries determine how much insurance should cost. They do this by comparing the cost of providing coverage with the money needed to cover expected losses. Then they set insurance rates accordingly.
For banks or other financial companies actuaries work also calculate odds. They design pension plans by calculating the amount of money that can be made on investments. They calculate how much people need to pay into their pension or retirement plans to offset pension payments. Some price corporate stock offerings. Also on contract basis actuaries provide advice and services to clients.
|
