What do pricing actuaries do

Evaluation of the assessment grid used in homeowner insurance by an insurer operating in Belgium. Revision of the technical price list for a leading Belgian mutual insurance company in complementary health insurance hospital and dental coverage and projections of the increases in claim costs. Risk classification in life insurance and lapse rate modelling for a major German reinsurer.

Development of relational and credibility models in life insurance for a major French reinsurer. Projections of the costs of pension for civil servants, performed for the Belgian Ministry of Finance. Creation of the medical index and the medical liability fund under the Belgian law. Development of the loss distribution approach to operational risk in line with the Basel Committee proposal for the world largest settlement bank. Denuit, M. Wiley, New York. Pitacco, E. Oxford University Press.

Tome II: Tarification et Provisionnement. And some scientific papers published in the last few years: Dhaene, J. Lifelong health insurance covers with surrender value: Updating mechanisms in the presence of medical inflation.

Gbari, S. Dal, L. Extreme value analysis of mortality at the oldest ages: A case study based on individual ages at death. Therefore if you estimate selling a certain amount of hotdogs per month, you know how much to charge to have a certain amount of profit.

For each type of client, how much will insuring this person with a specific policy cost on average? For example a 60 year old smoker will cost more than a 20 year old non-smoker. Valuation actuaries work on estimating the future liabilities associated with past risk transfers.

How much does the company need to set aside to pay for all the claims it says it will? In the above example of a health insurance policy sold, how much money should be set aside to pay for future claims? In insurance, a reserve is similar to a savings account: It is the amount of money that the insurance company needs to have available in order to pay for all the claims that may be made in the future. Sometimes claims may be made 10, 20, or even 30 years or more into the future!

So, this requires an actuary to predict the timing and cost of these events so that when the time comes in the future to pay the claim, the insurance company will have enough money available. Because of this, they need a lot of specialized training.

What does an actuary do for an insurance company? There are two primary things that actuaries do for an insurance company. Pricing actuaries calculate premiums and valuation actuaries calculate reserves. What does an actuary do on a daily basis? The tasks that an actuary will do on a daily basis depends on the type of actuary they are. Generally actuaries are using data to make predictions for the future and quantify risk. Pricing actuaries complete complex mathematical analyses that form the basis for company financial decisions and pricing strategies.

Success in this job requires strong mathematical abilities. Computer skills and statistical modeling skills are also high on the list for many potential employers. Actuaries must also have strong analytical, reasoning and problem-solving skills.

Even though the BLS expects employment opportunities to grow faster than the average of all occupations, the job market is still very competitive, because the career field is small, with limited job openings. Actuaries who take and pass professional exams and who have work experience are the top prospects for employers.