What is an Actuary and What do Actuaries do?

A qualified professional in the subject of Actuarial Science is called an actuary.

An actuary is a financial problem solver with a unique blend of mathematical, analytical and business skills. Actuaries, utilizing their mathematical and statistical skills, analyze past events, assess present risks and model the future. Actuarial skills are valuable for any business managing long term financial projects both in the public and private sectors.

 

According to Institute of Actuaries, UK: “Actuaries are respected professionals whose innovative approach to making business successful is motivated by a responsibility to the public interest. Actuaries identify solutions to financial problems. They manage assets and liabilities by analyzing past events, assessing the present risks involved and modeling what could happen in the future.”

 

Accountants and auditors work with the past; they check the financial transactions of previous years to ensure that everything had been done properly. Actuaries, utilizing their mathematical and statistical skills, analyze past events, then assess present risks, and finally model what could happen in future.

 

This allows the actuary to improve financial decision-making by developing models with which to evaluate the current financial implications of unsure future events. The application of such models to various social and financial problems has resulted in actuaries also being referred to as financial architects or social mathematicians.

 

Much of life is very uncertain. There are the risks of sickness, disability, unemployment, property damage and loss, and dying young or unexpectedly. Even longevity has its risks, such as potential chronic illness or problems with sustainable financial welfare. While the risks are unpredictable for any one individual, actuaries can, for example, analyze statistics to design and price insurance policies and benefit plans for a group of individuals to spread individual risks among members of the group. Actuaries decide the premiums for not only the regular insurance policies but also for policies insuring events such as a match or a tournament, crucial organ of a sportsman, premiums for crop in an agricultural field. They also decide premium for a comprehensive farming policy that insures life of the farmer, his key laborers, his cattle, crop and so on.

 

Actuaries can provide evidence in courts of law on the value of opportunity losses. By applying skills to various situations involving uncertainties, actuaries help people to plan better for the future by reducing risk.

 

“Actuaries provide commercial, financial and prudential advice on the management of assets and liabilities - most especially where long term management and planning are critical factors.” (Source: www.actuaries.org.uk )

 

Actuarial skills are valuable for any business managing long term financial projects both in the public and private sectors.

 

Actuaries apply professional rigor combined with a commercial approach to the decision making process.

 

Actuaries balance their role in business management with responsibility for safeguarding the financial interests of the public. The duty of actuaries to consider the public interest is illustrated by their legal responsibility for protecting the benefits promised by insurance companies and pension schemes.

 

Actuaries can estimate uncertain future liabilities and certify them. Certification of such liabilities is the monopolistic power enjoyed by actuaries.



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We are delighted to announce one more alumnus to qualify as Fellow of Institute of Actuaries of India in March 2017: Divya Dadlani. Congratulations to Divya and Team DSACtEd!
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