Actuary

Actuary, person who applies the theories of probability and statistics and the principles of finance to problems of insurance, pensions, population studies, and related fields. Mortality tables and probability tables dealing with death, accidents, sickness, fires, and industrial losses, as well as natural disasters, are determined by an actuary. On the basis of these tables the rates for the various types of insurance are determined, and the various underwriting practices, such as the amount of money reserve that is required to settle expected claims, are established. The basic assumption in actuarial science is that the frequency with which events occurred in the past may be used to predict or measure the probability of their occurring in the future (see Insurance).

In addition to serving in the insurance field, actuaries are widely employed in various government agencies that deal with regulating the insurance-agency industry and in connection with operating the social security, medicare, and pension programs. The relatively new field of operations research employs a large number of actuaries. The use of high-speed electronic computers and data-processing machinery has created many new applications of actuarial science.