 One of the main functions
of actuaries is to help businesses assess the risk of certain events
occurring and to formulate policies that minimize the cost of that risk.
For this reason, actuaries are essential to the insurance industry.
Actuaries assemble and analyze data to estimate the probability and
likely cost of the occurrence of an event such as death, sickness,
injury, disability, or loss of property. Actuaries also address
financial questions, including those involving the level of pension
contributions required to produce a certain retirement income and the
way in which a company should invest resources to maximize its return on
investments in light of potential risk.
 Using their broad knowledge of
statistics, finance, and business, actuaries help design insurance
policies, pension plans, and other financial strategies in a manner
which will help ensure that the plans are maintained on a sound
financial basis.
 Most actuaries are employed
in the insurance industry, specializing in life and health insurance or
property and casualty insurance. They produce probability tables which
determine the likelihood that a potential future event will generate a
claim. From these tables, they estimate the amount a company can expect
to pay in claims. For example, property and casualty actuaries calculate
the expected amount payable in claims resulting from automobile
accidents, an amount that varies with the insured person's age, sex,
driving history, type of car, and other factors. Actuaries ensure that
the price, or premium, charged for such insurance will enable the
company to cover claims and other expenses. The premium must be
profitable, yet competitive with other insurance companies. Within the
life and health insurance fields, actuaries are helping to develop
long-term-care insurance and annuity policies, the latter a growing
investment tool for many individuals.
 Actuaries in other
financial services industries manage credit and price corporate security
offerings. They also devise new investment tools to help their firms
compete with other financial services companies. Pension actuaries
working under the provisions of the Employee Retirement Income Security
Act (ERISA) of 1974 evaluate pension plans covered by that Act and
report on the plans' financial soundness to participants, sponsors, and
Federal regulators. Actuaries working in government help manage social
programs such as Social Security and Medicare.
Note:
Some resources in this section are provided by the the US Department
of Labor, Bureau of Labor Statistics.
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