Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in insurance, finance and other industries and professions. Actuarial science includes a number of interrelated subjects, including mathematics, probability theory, statistics, and finance, economics, and computer science. Generally, insurance companies employ professionals known as actuaries to determine risk levels and premium prices for a given insurance policy.
Through their knowledge of statistics, finance, and business, actuaries assess the risk of events occurring and help create policies for businesses and clients that minimise the cost of that risk. For this reason, actuaries are essential to the insurance industry.
Actuaries analyse data to estimate the probability and likely cost to the company of an event such as death, sickness, injury, disability, or loss of property. Actuaries also address financial matters, such as how a company should invest resources to maximise return on investments, or how an individual should invest in order to attain a certain retirement income level.
Using their expertise in evaluating various types of risk, 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. Actuaries do so through their helping set a price
Most actuaries are employed in the insurance industry. Actuaries ensure that the premium charged for such insurance will enable the company to cover potential claims and other expenses. This premium must be profitable, yet competitive with other insurance companies.