Actuarial Science

A discipline in which mathematical and statistical methods are used to assess the risk in the insurance and finance industries is known as actuarial science. Professionals who are qualified in assessing the risk in insurance and finance industries are known as actuaries. Actuarial science includes many other subjects like probability, mathematics, statistics, finance, economics, financial economics and computer programming. It is also applied to property, causality, liability insurance and general insurance. Property and causality insurance are complex and have diversity of risks. In the field of reinsurance actuarial science help to design and price reinsurance retro-reinsurance schemes and to establish reserve funds for known claims. It is important to make sure that the loss must be crystal-clear. Insurer should be able to measure the loss financially. That is there should not be any argument whether the payment is due or not. The amount of payment also should be clear. The nature of loss should be random.

Life Insurance

Life insurance is a contract between the policy holder and insurer. In this agreement insurer promises to pay a designated beneficiary upon the death of the person insured. In many contracts events such as critical illness will also be paid.  The policy holder is supposed to pay a stipulated amount or premium at regular intervals. Even death expenses like funeral expenses are included in premiums offered by several insurers. The peace of mind that the policy holder experience after taking the policy is the value for that policy. This satisfaction can never be gained from the actual claim event. Life Insurance quotes are calculated with the help of mortality table which are actually calculated by actuaries. The requirement for insurable interest prevents people from benefiting from the purchase of purely exploratory policies on people after death. In life insurance, the policy becomes null if the insured commits suicide within a specified time. The policy will be nullified if anything is presented wrongly in the application. Life insurance is very distinctive in giving the customer an assurance to protect their assets, along with asset appreciation elements.

Actuarial Firms

Actuarial firms provide actuarial, risk management and related services to insurance companies. These firms apply mathematical and statistical methods to assess risk in industries. Professionals who are qualified in the field of risk management are known as actuaries. Aon Corporation, Buck Consultants, EMB consultancy, Hay group, Hewitt Associates, Insurance services office, Kwasha Lipton, Milliman, Mercer, Tillinghast, towers Perrin, towers Watson and Watson Wyatt Worldwide are the major Actuarial firms.

Questions:

• Define Actuarial science?
• What is meant by life insurance?