What role do actuaries play in the insurance industry?

Actuaries play a crucial role in the insurance industry primarily by assessing risks and helping to calculate premiums. Their expertise in mathematics, statistics, and financial theory allows them to evaluate the likelihood of events occurring, such as death, illness, or property damage. This risk assessment is essential for developing accurate pricing models for insurance policies.

By analyzing past data and trends, actuaries can predict future claims and set premiums that are both competitive in the market and sufficient to cover those anticipated claims. This function not only ensures the financial stability of the insurance company but also protects policyholders by maintaining the integrity of the insurance product. Their work ultimately contributes to the overall sustainability of the insurance system, enabling insurers to take on risk and provide assurance to policyholders.