What is the role of an actuary within an insurance company?

The role of an actuary within an insurance company is primarily focused on assessing and managing risk through the use of mathematics, statistics, and financial theory. Actuaries are essential for calculating the likelihood of future events, such as policyholder claims, and determining the necessary premiums to cover those risks while ensuring the company's profitability and stability.

Actuaries analyze data related to various factors, including demographics, health, and historical claims, to estimate the probability of different outcomes. This allows them to set premiums at levels that are adequate to cover expected claims and administrative costs while remaining competitive in the market. The work of actuaries also encompasses ensuring that the insurance products offered align with regulatory requirements and are sustainable over the long term.

While selling insurance policies is an important aspect of insurance operations, it is primarily the role of insurance agents rather than actuaries. Similarly, claims adjusters are focused on assessing damages and validating claims rather than on the financial calculations that actuaries perform. Legal advisors play a crucial role in interpreting contracts and navigating legalities but do not engage in the statistical risk assessments that characterize an actuary’s responsibilities.