Actuaries will make risk assessments of possible to probably occurring events, and then help to produce procedures for clients and businesses in order to minimize costs of the potential risks, should they occur. It’s for that reason that actuaries are an essential part to many different industries; however, they’re of specific need to the industry of insurance.
Actuaries will estimate likely costs and probabilities of various events occurring through analyzing data. Some of these events are going to include some of the following:
- Loss of property
Furthermore, actuaries are going to address company’s monetary matters, for example, in what way the company can maximize their investment returns through investments of their resources, or in what way an individual ought to capitalize their resources to be able to achieve a firm financial income for their retirement years. Through the use of the expertise they gain within a variety of risk type evaluations, the actuaries are going to help design a variety of different plans strategies and polices for the companies and the individuals that they work for, such as, the designing of:
- Pension plans
- Insurance policies
- Financial strategies
They’ll design all of these plans through a manner that will help to make certain that the strategies are upheld on a solid base financially.
Within the fields of life and health insurance, the actuaries are going to help the companies develop both health and long-term care insurance policies through the predicting of different disease and ailment likelihoods, such as:
- Heart disease
- Other chronic ailments
They’ll structure this within specific groups that will have things in common, such as, family history of illnesses or groups of people that are living within a particular area. The work of actuaries is something that doesn’t just benefit the company; it benefits the consumer as well. The reason for this is that the work they do to accurately predict the likelihood of specific health events among particular groups is going to ensure that the insurance company is fairly assessing their premiums according to the risk to the companies that they work for. Furthermore, life insurance actuaries are going to help their companies develop their life and annuity insurance policies for individuals through the estimations on the length of time someone is expected to live.
The actuaries working within the other financial service industries are going to help set a price for the offerings in corporate security and manage credit. Additionally, they’ll work to devise new tools for investment that are going to help firms compete with other companies. The pension actuaries are going to work according to the ERISA and the provisions in which it sets. The ERISA act of 1974 sets the minimum pension and health plan standards within the private industry. The actuaries that are working in the government are going to help with social program management, such as, with Medicare and Social Security.
Almost all actuaries are going to be employed within the insurance industry through specialization in either life and health or property and casualty insurance. Actuaries will use sophisticated modeling techniques in order to make future forecasts of the likelihood of specific events occurring, along with the impact of the events that those events would have on claims and potential company losses. For instance, actuaries working in property and casualty are going to calculate the expected claim numbers that will result from auto accidents, which is going to vary dependent upon the insured parties, sex, car type, credit, age along with a variety of other factors as well. Actuaries are going to ensure that the premium that’s charged for the insurance is going to be able to enable the insurance company to cover the other expenses and potential claims. The premium will need to be competitive with other insurance companies while still allowing for profitability.
Actuaries are going to help determine corporate risk policies, as well as helping to explain some complex technical matters to a variety of people and/or companies, such as:
- Company executives
- General public
- Government officials
They might testify on proposed legislation before public agencies which will affect their businesses or to explain changes to customers within contract provisions. Additionally, actuaries might help the companies they work for develop plans to enter into new business lines or within new geographic markets through forecasting the demands within competitive settings.
The work environment for most actuaries will be a desk job, and the actuary’s office will most often be quite pleasant and comfortable. Although most actuaries are going to be working a 40 hour work week, those that are in the consulting jobs will often be required to work a little more than 40 hours a week due to the necessity of travel.
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