What is the role of an actuary in the insurance industry?

The role of an actuary in the insurance industry is crucial and primarily involves analyzing data to assess insurance risks and calculate appropriate premiums. Actuaries utilize statistical methods, mathematical models, and historical data to evaluate the likelihood of certain events occurring, such as claims or losses. By doing so, they help insurance companies determine how much they should charge for premiums in order to remain financially viable while still being competitive in the market.

Actuaries also project future financial outcomes, helping insurance companies to set their rates based on potential risks associated with different policyholders and coverage types. This modeling is essential for maintaining the stability and profitability of an insurance company. Their work ensures that the company can cover claims while also meeting its obligations to policyholders and shareholders.

Roles such as writing insurance policies, handling customer service inquiries, or enforcing regulations fall outside the specialized expertise of an actuary and are carried out by other professionals within the insurance industry.