An actuary is defined as a professional who works by calculating risks and utilizing a rubric of information, statistics and history. In the insurance industry, many insurance companies hire huge amount of services from actuaries to help in analyzing policies, evaluating filed insurance applications by individuals and to help in setting the policies in the company. Aside from insurance industry, an actuary may find employment in investment firms too. The tasks of an actuary is quite interesting and varied that basically requires a strong background on mathematics most especially in the field of statistics. Furthermore, knowledge in sociology and other humanities subjects are required. In many regions of the world, a person must also take a board examination to become an actuary.
In the field of insurance industry, an actuary works by helping the company in deciding whether to issue a policy or not is a good idea as well as how much would be charged to the client for the policy. For instance, earthquake insurance in Kansas is less expensive compared to California since in California, the insurance provider is at high risk of paying out more policies. In this case, the actuary views the condition through geological statistics. In other types of insurance policy such as life and health insurance, an actuary may consider the gender and age of the policyholders as well as their health records. The actuary will review and compare the data of the people in certain age groups to determine ways on how to handle the kind of policy.
Because an actuary handles risk, the task is obviously risky. Serious typhoons and other natural calamities may arrive unpredictably and are predicted or not by an actuary, and will often cause serious blow to the insurance company. This is the reason why the job of an actuary needs extensive education and a significant amount of intuition, since an actuary works in a field of predicting the unpredictable. On the other hand, actuaries in the financial industry are very important since they help in protecting major investments through keeping a closer look on the competitive market while creating long term prediction and projections.
As insurance companies secure the policyholder from any financial risk, a good actuary also works by reducing the amount of potential risks and damages. For instance, a car insurance policy would cost less if the car is equipped with more safety equipments and systems such as air bags and seat belts. An insurance company may not issue a home insurance to a house that appears to be unsafe after the made inspection. In this case, an actuary may provide options and suggestions to the home owner to able to acquire a home insurance. Generally, an actuary chooses a field of specialization such as health insurance, life insurance, home insurance and investments. As of today, actuaries are in demand due to the new companies that are also competing in the market. To be able to succeed in the insurance industry, insurance companies should have learned and competitive employees in the business.