Actuary Job Duties
- Expert Witness Testimony
- Reviewing Company Policies
- Working on Statistical Data
- Developing New Risk Analysis Methods
- Communicating to Businesses
An actuary is a trained professional who analyzes the financial cost of risks and uncertainty and makes predictions on how much of a risk a venture or client may be and how to best compensate for that risk. Actuaries usually have an accounting, actuary or finance degree. Actuaries may work in accounting firms or financial institutions, but they’re usually found working for insurance companies. An actuary working for an insurance company has the duty of determining how much of a financial risk a customer might be to the insurance company and what kind of premium they should be charged to cover the possible risk. Although actuaries have many duties, here are 5 of their main duties.
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1. Expert Witness Testimony
Actuaries are often called up to provide testimony as expert witnesses in lawsuits dealing with insurance or financial risks in general. An actuary may just be asked to testify as an expert witness in a lawsuit, or they may be asked to testify for their employees. Actuaries working with insurance companies may be requested to testify in government cases where federal or state legislatures are attempting to create new laws dealing with insurance companies.
2. Reviewing Company Policies
Within every business, you will find contracts and policies of some sort. A very important duty of an actuary is reviewing company policies and contracts. Actuaries also look over annuity plans, insurance policies, pension plans, and various contracts. Their purpose of looking over and reviewing these documents is to determine the risk factors in each contract and help the company set guidelines that are beneficial and pose fewer risks to the employees.
3. Working on Statistical Data
One of the most important duties of an actuary is to gather and analyze data. They use data on accidents, sickness, death, retirement, and disability in their area as well as other information that may be relevant to the employer. They compile all the data into an algorithm to determine how they affect financial risk. Here is one example. An actuary working for an auto insurance company will look over a customer’s driving record and vehicle information to determine if the customer is a good risk for the insurance company and what sort of premium the customer should be charged to cover the possible risk.
4. Developing New Risk Analysis Methods
Actuaries often work alongside statisticians, mathematicians or accountants and rely on their data to help come up with statistical models. Although actuaries analyze financial risks based on statistical data, the data does not always remain the same, and adjustments must be made. Actuaries are often asked to gather new statistical data to evaluate risks of insurance policies or on situations that may be present that were not present in the past.
5. Communicating to Businesses
Although a lot of the duties of an actuary involve collecting and analyzing data, actuaries also spend an equal amount of time communicating their findings to different managers within a company or to different businesses. They used computers and statistics to determine possible risks, prepare reports and presentations, and communicate their findings to clients and stakeholders.
With the economy rising as it’s been lately, actuaries are becoming more in demand, according to the U.S. Bureau of Labor Statistics (BLS). The bureau predicts a job growth of 22% is predicted for actuaries between 2016 and 2026. An individual with a finance degree and an interest in working with money can enjoy a promising and exciting career.
Related resource: What is an Actuary?