An actuarial scientist is a statistician who works for or with insurance companies, financial institutions, and government agencies to calculate and reduce the risk of events and issues that affect a company or individual. An actuarial scientist’s predictions are used to determine rates such as insurance premium costs, pension investment packages, and credit eligibility criteria. In most places, actuarial scientists must pass a series of exams administered regional or national authorities in order to practice.
The majority of actuarial scientists work for insurance companies, and they are the foundation of the industry’s methods for determining premium rates and expected costs in the event of a catastrophe. An actuarial scientist working for a health insurance company will examine demographic trends to predict the likelihood of a major medical event, such as cancer or injury. Because some occupations are more prone to injury than others, an actuarial scientist is in charge of determining whether and how much insurance should be offered to those in those occupations. An actuarial scientist uses statistical modeling methods and data to help a company prepare new product packages and services to offer to customers, in addition to determining risk to set premium rates at an insurance company. An actuary’s advice is frequently sought to develop methods within a company to reduce the likelihood of an unfavorable event, such as including preventative health care services as part of an insurance package to help reduce future health-care claims.
Actuaries are also employed property insurance companies. They use statistical averages and mathematical probability to make similar calculations based on historical data and current trends. An actuarial scientist employed a property insurance company assists in predicting the likelihood and cost of claims in a specific region, such as one prone to hurricanes or earthquakes.
Actuarial scientists are employed financial institutions to determine pension rates and plans, in addition to working for insurance companies. Actuaries are also employed government agencies to calculate risk for government services and to provide advice on new policies and legislation. Actuaries may work for a larger corporation or for an actuarial firm that provides contract consulting services to clients. Lawyers may occasionally call actuaries to testify in court to assist them in determining issues such as insurance claim damage payouts or how much money to award in the event of a debilitating accident based on future earning calculations.