An actuarial scientist works for or with insurance companies, financial institutions, and government offices and uses statistics to calculate and reduce risk of events and issues that affect a business or individuals. The predictions calculated by an actuarial scientist are used to determine rates such as insurance premium costs, pension investment packages, and criteria for credit eligibility. Actuarial scientists are required in most locations to obtain licensing through a series of exams administered by regional or national authorities.
Most actuarial scientists work for insurance companies and are the backbone of the insurance industry's methods to determine premium rates and expected costs should a catastrophe occur. An actuarial scientist that works for a health insurance company will look at trends in demographics data to determine the likelihood of a major medical event, such as cancer or injury. Some occupations may be more prone to injury than others, so an actuarial scientist is responsible for determining if the company should offer individuals in the occupation insurance and at what cost. In addition to determining risk to set premium rates at an insurance company, an actuarial scientist also uses statistical modeling methods and data to help a company prepare new product packages and services to offer to customers. The advice of an actuary is also often used to develop methods within a company to reduce the chance of undesirable event occurring, such as offering preventative health care services as part of an insurance package to help reduce future types of health care claims.
Actuaries also work for property based insurance companies. They make similar calculations based on statistical averages and mathematical probability given past data and current trends. An actuarial scientist that is employed by a property insurance company helps predict the chance and cost of claims should a catastrophe occur in a specific region, such as in an area prone to hurricanes or earthquake.
Beyond working for insurance companies, there are actuarial scientists that are employed by financial institutions to determine pension rates and plans. Government offices also employ actuaries to calculate risk for government services and advise on new policies and legislation. Actuaries may work for a larger company or an actuarial firm that provides consulting services to clients on a contract basis. Actuaries may occasionally be employed by lawyers to testify in court to help decide issues such as insurance claim damage payouts, or how much money to award in the case of an debilitating accident based on future earning calculations.