Many actuaries are needed in the insurance business. Using statistical data, the actuary can help insurance companies plan what policies to offer and for what cost to the consumer. Actuaries are a valuable asset to insurance companies because so many factors must be weighed in designing packages to offer. The insurance company must make a profit to stay in business so an actuary needs to weigh several elements at the same time.
One area that is always in demand is as a life insurance actuary. As one may assume here, an actuary will be studying how long an individual may live. While in the natural this may seem gruesome to consider but when you relate it to statistics it is all about the numbers. You will still need to consider the very human elements of gender, age and lifestyle habits like smoking.
As an actuary you will be looking at individuals and groups to consider averages. Once an actuary looks at an individual they then extrapolate that information to the whole and find comprehensive data. Obviously the actuary learns how to balance information as skews in the data will appear. But taken as a congregate number, useful data can be extrapolated.
Besides insuring peoples’ lives and health care, insurance companies also supply coverage for property. Property and casualty insurance actuaries look at additional factors when considering physical entities such as buildings, automobiles and homes. Consumers want to protect their physical assets from damage such as fires, natural disasters, and accidents.
For example, in auto insurance an actuary will look at a driver’s age, type of car being driven, driving history including infractions and sex of the driver to determine likelihood of accidents. As one can assume the premiums go up of a teenage male driving a sports car. An actuary also looks at where that auto is parked at night. Is it parked in a driveway? In a metropolitan area with a high crime zip codes? Or does the driver live on a farm in the Midwest? All these factors are important to an actuary.
Sources Cited: Bureau of Labor Statistics