Crunch numbers to come up with fair and profitable policy prices.
What does an Insurance Actuary do?
Although we all complain about it, insurance is a pivotal part of any financial plan. After all, one car accident or hospitalization could wipe out a retirement fund, college savings plan, or bank account.
Sure, people sometimes pay for insurance that they don’t need, but they’re not the only ones taking a risk. Insurance companies also take a risk every time they offer medical, life, auto, or home insurance. That’s why they employ the Insurance Actuary to minimize the amount of risk they face.
And how is risk calculated? As an Insurance Actuary, you think like an Economist and a researcher. You do a lot of math and ask a lot of “what if” questions. The main goal of your job as an Insurance Actuary is to evaluate all possible outcomes for all groups of people.
Take life insurance, for example. Is it more likely that a person will die if he is single? Will he live longer if he owns a home? What about if he drives a car, goes to school, or travels for work?
With that information at hand, you write up reports that outline your findings. Then the company you work for makes decisions about what rates to charge the customers.
This is an important financial decision. If they charge too much, the customer will choose a better deal elsewhere. But if they charge too little, the company might not have enough money to cover overhead and pay out claims when they come in.