Actuaries are people in the insurance industry who mathematically calculate the risk of losses in insurance companies and work to mitigate the impact. They are professionals who passed a series of tests to get certified and obtain a license to practice their profession. Included in their responsibilities are:
Ratemaking. This is the process of computing for frequency and size of potential losses of security holders that will gain money for the company for future profit.
Reserving. This is the process of mathematically determining the amount of money on hand that the insurance company must have to sustain its expenses for future claims.
Regulating Insurance. Regulation departments in insurance companies are supervised by actuaries. They are the ones who review the proposed rated and reserves to make sure they are reasonable values.
Risk Management. Actuaries work to decrease the downside to gain more profit. Risk management actuaries are more concerned with the company’s solvency.