What is the role of an actuary in the insurance industry?

An actuary's primary role in the insurance industry is to assess financial risks and uncertainties. This involves the use of mathematical and statistical methods to calculate the likelihood of events happening and their financial consequences. When it comes to determining how much premium a customer will pay, actuaries analyze various factors such as age, health status, historical data related to claims, and other risk factors. Based on this analysis, they can set premiums that are adequate to cover potential claims while ensuring that the insurance company remains profitable.

Actuaries play a critical role in ensuring that insurance products are priced appropriately, balancing the need for affordability for customers with the need for financial sustainability for the insurer. By applying their expertise in statistics and finance, actuaries help create a framework that allows for both protection against risk and the operational viability of insurance products.

In contrast, negotiating policy terms, processing claims, and marketing insurance products involve different skill sets and job functions that are not the primary responsibility of actuaries.