What does an actuary primarily do in the insurance industry?

An actuary plays a vital role in the insurance industry by analyzing financial risk using statistics and mathematics. This involves utilizing complex mathematical models to evaluate the likelihood of certain events occurring, such as illness, accidents, and deaths, and how these events can impact the financial stability of insurance companies. Actuaries are responsible for calculating premiums, setting reserves, and determining the overall financial health of insurance products, all of which require a deep understanding of probability, statistics, and financial theory.

Their work helps ensure that insurance policies are priced appropriately and that the insurance company can meet its future obligations to policyholders. By analyzing mortality rates, claims data, and other relevant statistics, actuaries provide crucial insights that contribute to the strategic decision-making process within the company, ensuring sustainability and profitability.