Actuaries assemble and analyze statistics to calculate probabilities of death, sickness, injury, disability, unemployment, retirement, and property loss. They work for insurance companies, consulting firms, government departments, banks and investment firms, public accounting firms or anywhere risk management is needed. Most actuaries specialize in one of the three fields which are listed below.
Property and casualty insurance actuaries work for insurance companies. They use historical information and data to determine, for example, the probability of claims due to automobile accidents, which can vary depending on the insured’s driving history, type of car, and many other factors. Actuaries must make sure that the price charged for the insurance will enable the company to pay all claims and expenses as they occur. This price must be profitable and yet be competitive with other insurance companies.
Life actuaries also work for insurance companies. They assemble and analyze statistics to calculate probabilities of death to insured persons. With this information, they determine premium rates and benefits. As with Casualty actuaries, life actuaries must insure that the premium charged will enable the insurance company to gain a profit, yet still be competitive among other companies. Their areas include pension planning, financial planning, and investment.
Consulting actuaries normally work for benefits consulting firms, management consulting firms, which provide advice for a fee to various clients including insurance companies, corporations, hospitals, labor unions, government agencies, and attorneys. Some consulting actuaries set up pension and welfare plans, calculate future benefits, and determine the amount that an employer must contribute to its pension fund in order to be able to provide those benefits.
