About the Actuary

Traditional employment for actuaries includes the ratemaking aspect of insurance. Ratemaking is the process by which actuaries statistically determine the likelihood (frequency) and size (severity) of losses by their company's policyholders and determine rates that will earn the insurance company enough money to pay future claims and make a profit.

Actuaries are entrusted with calculating the reserves or the appropriate money an insurance company should set aside to meet its policyholder obligations. In forecasting the cash flows, an actuary enables the insurance company to maintain the right balance between fulfilling its obligations to the policyholders as well as achieving its desired level of profitability

In most countries, an independent regulator regulates the insurance industry. Actuaries who work for the regulator's office provide oversight of the insurance industry by reviewing proposed rates, solvency and reserves for insurance companies to ensure that interests of policyholders are protected.

General Insurance Companies offer a wide variety of contracts such as Marine. Fire and miscellaneous insurance. Actuarial expertise is used across an array of roles such as designing and pricing of a product, financial reporting and corporate planning.

Actuaries are playing an important role in design of Health Insurance Products. In developing markets,.few people have health insurance and the potential target market is vast. The provision, administration and finding for healthcare is relatively complex

Employers provide benefits like Pensions, Gratuity. Stock Options, Long-term Incentives and Compensated Absences. These benefits depend on uncertain events like mortality, attrition rates, salary increases and asset yields. Actuaries make predictions about when workers are likely to retire or leave their jobs, salary increases, investment earnings, inflation and other factors in order to determine the value of benefits an employer should provide in books of account

Actuaries advise on funding levels, asset-liability management, member communication and statutory compliance of retirement benefits funds.

Reinsurance is insurance for an insurance company. Actuaries in reinsurance perform similar ratemaking and reserving functions, but these are wider in scope and coverage. An important role is played by actuaries in the acceptance of large and unusual risks.

Although less traditional than ratemaking or reserving, many actuaries work in insurance in a risk management role. In these types of roles, an actuary gauges the risks of his organization and works to limit the downside involved in these risks while maximizing the potential for profit The main concern of a risk management actuary is the solvency of his company.

The role of an actuary also extends to areas of product design, investments and asset-liability modeling.