A professional who specializes in calculating risks, using statistics, history, and a rubric of information is referred to as actuary. In order to help analyze policies, look at individual insurance applications, and to help set company policies, the insurance industry hires a large amount of actuaries and an actuary may also find employment at investment firms as well.
There is a variation in the work and it is interesting, and it needs a strong grounding in mathematics, particularly statistics, as well as grip on the subjects of sociology and other humanities fields. In most regions of the world, in order to become an actuary an individual must also sit a board examination.
The Role of an actuary in the Insurance Industry
The role of an actuary in the insurance industry is that he or she helps a company to decide whether or not issuing a policy is a good idea, and how much the company should charge from a client for the policy. For example, in the state of Kansas earthquake insurance is significantly less expensive that it is in California, because in California, there is a greater risk for the insurance company of having to pay out on the policy.
In this example, the actuary has to look at the geological statistics. For other types of insurance, such as health or life insurance, an actuary may have to look at the age and gender of the policy holder and also his or her health records. The actuary then have to compare the data for people of that age group in order to determine how the policy should be handled.
Job of an actuary is risky
Due to the reason that an actuary specializes in risk, the job is inherently risky. Serious hurricanes and other natural disasters can arrive whether or not an actuary has predicted them, and this will sometimes represent a serious financial loss to an insurance company.
For this reason the job requires extensive education and a certain amount of natural intuition, as an actuary must be able to predict what is unpredictable. Actuaries are very important in the financial industry, as by keeping a close eye on the market while making long term projections they help to protect major investments.
Since most insurance is held in order to protect the policy holder from financial risk, an actuary also works for reducing the amount of potential damage. Usually, an actuary picks a particular field to specialize in, such as home insurance, health insurance, investments, or life insurance.
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