ACTUARIES ,ITS ROLE AND
FUNCTION
GROUP MEMBER
JYOTI GUPTA
DISHA VERMA
KULDEEP HUDDA
( VITD )
WHAT IS AN ACTUARY
An actuary is a business professional who analyzes
the financial consequences of risk. Actuaries use
mathematics, statistics, and financial theory to study
uncertain future events, especially those of concern to
insurance and pension programs. Actuaries may work
for insurance companies, consulting firms,
government, employee benefits departments of large
corporations, hospitals, banks and investment firms,
or, more generally, in businesses that need to
manage financial risk.
The future is uncertain. Some of the events that can
happen are undesirable. "Risk" is the possibility that
an undesirable event will occur. Actuaries are experts
in:
• Evaluating the likelihood of future events
• Designing creative ways to reduce the likelihood of
undesirable events
• Decreasing the impact of undesirable events that do
occur.
The impact of undesirable events can be both
emotional and financial. . Actuaries are the leading
professionals in finding ways to manage risk. It takes
a combination of strong analytical skills, business
knowledge and understanding of human behavior to
design and manage programs that control risk.
What is risk and how do actuaries manage
risk?
•Risk comes in many forms. Every person or
organization faces risk. As experts in measuring and
managing risk, actuaries fill a significant need in our
society.
•There are many ways to manage risk. While there are
some well-established techniques, both academics and
practicing actuaries, are constantly inventing new ways
to maximize financial results for the participants in our
economy, without exposing them to excessive risk.
WHO CAN BE AN ACTUARY
Education: An actuary is expected to have at least a
bachelor’s degree. There is prescribed coursework in
statistics or actuarial science (a branch of applied
statistics), plus business, finance and economics. A
high degree of computer literacy is increasingly
important, especially with regards to software
packages commonly used for database and statistical
analysis. An MBA can be a useful credential,
depending on the firm.
Certification: The Society of Actuaries (SOA)
certifies actuaries in life insurance, retirement plans
and investments. The
Casualty Actuarial Society (CAS) certifies actuaries
in property, casualty and liability insurance. Reaching
the highest level of certification is a lengthy process,
requiring coursework and the passing of nine
separate exams normally over the course of six to
nine years. Three of the first four exams are common
to both the SOA and the CAS tracks, allowing the
prospective actuary some time to decide on his or
her specialty.
ROLE OF AN ACTUARIES
•Express an opinion on reinsurance
adequacy.
•Express an opinion on underwriting policy .
•to co-ordinate the calculation of technical
provisions
to express an opinion on the overall underwriting
policy.
to express an opinion on the adequacy of
reinsurance arrangements
analysis of risk and risk management
asset/liability management
overall financial management.
FUNCTION OF AN ACTUARIES
•analysing and managing uncertainty
•evaluating financial consequences
•determine Premium Amounts
•risks Assessments
The first duty which an actuary must undertake in
their job role is to review a variety of documents.
These documents relate to statistical information,
insurance plans, annuity plans, pension plans,
contracts and company policies.
to determine company policy and explain such
policy and its aspects to those who will benefit
from it.
An actuary may also do consulting work and help
various companies with their statistical needs
and company policy construction.
The actuary is also the go to individual for any
questions relating to their job responsibilities
asked by the customers of the company.
The actuary must use his/her mathematical
abilities to format equations which will aid in the
resolution of an issue.
