Actuarial Society of New York University

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What is an actuary?

Have you ever wondered how insurance companies and other organizations measure the risk associated with insuring individuals and companies against the losses incurred as a result of unpredictable events, such as accidents, sickness, and lawsuits? Or how insurance companies manage their risk so as to have sufficient assets on reserve to pay out claims resulting from such disasters as hurricanes and floods?

Professionals known as actuaries handle these kinds of problems. Because of the nature of the insurance business, an actuary has to be trained in the disciplines of mathematics, probability, statistics, economics and finance as applied to the problems of evaluating and measuring risk. Actuaries have been called the architects of the insurance industry because they design the structure of a variety of benefits for society. Examples of problems that actuaries deal with are the determination of premiums for life, health, automobile, and homeowner policies, the design of pension plans, and the management of insurance assets to control the risk of the insurance company.

Actuarial work is one of the most interesting and exciting professions, because of the variety of functions actuaries are asked to perform. An actuary serves as a statistician and mathematician in performing the mathematics involved in designing insurance and pension funds. He or she serves as an investment analyst in managing the assets of an insurance company or pension fund. He or she serves in a marketing role in the promotion of different kinds of insurance benefits. It is a wonderful profession for an individual who enjoys mathematics and the problems associated with applying mathematical methods to problems that exist in society. In a recent survey which included over 4000 professions within the Untied States, the actuary profession was determined to be the most desirable. This conclusion was based on a number of characteristics that include compensation, working conditions, work variety, challenging problems, job security, mobility, and quality of life.

Actuaries have a large number of employment choices both with respect to the kind of career to choose and the area of the country to live. Actuaries are employed by a large variety of organizations, such as insurance companies, actuarial consulting firms, and government agencies like the Social Security Administration. The big centers of insurance activity in the United States are New York City, and Hartford, Connecticut, but actuaries can choose to work anywhere within the USA, Canada, or in any part of the world. The demand for actuaries in the United States continues to expand and the supply of trained professionals is very low.