Who is an actuary?

An actuary is a professional who specializes in evaluating financial risks using mathematics, statistics, and financial theory, primarily within the insurance and finance industries. They play a critical role in calculating the likelihood of future events, such as policyholder claims, and assess the financial implications of those events on insurance companies. This involves analyzing various factors, including age, health, lifestyle, and environment to establish risk assessments, which directly influence product pricing and reserve requirements.

The focus on calculating risk encompasses determining premiums for insurance products and ensuring that the insurance company remains solvent and can pay out claims. Therefore, the definition of an actuary fits perfectly with the role of someone who calculates risks and determines how these risks can be mitigated financially.

In contrast, while selling insurance policies, serving customers, or regulating practices are important roles within the insurance industry, they do not capture the specialized skill set and responsibilities that define an actuary.