Damage from Hurricane Katrina. Actuaries need to estimate long-term averages of such damage in order to accurately price property insurance.

An actuary is a business professional who deals with the financial impact of risk and uncertainty. ImageMetadata File history File links Download high resolution version (3008x2000, 2706 KB) Hurricane Katrina damage in Long Beach, Mississippi, which is west of Gulfport and east of Pass Christian. ... ImageMetadata File history File links Download high resolution version (3008x2000, 2706 KB) Hurricane Katrina damage in Long Beach, Mississippi, which is west of Gulfport and east of Pass Christian. ... This article is about the Atlantic hurricane of 2005. ...

Actuaries have a deep understanding of financial security systems, their reasons for being, their complexity, their mathematics, and the way they work (Trowbridge 1989, p. 7). They evaluate the likelihood of events and quantify the contingent outcomes in order to minimize losses, both emotional and financial, associated with uncertain undesirable events. Since many events, such as death, cannot be totally avoided, it is helpful to take measures to minimize their financial impact when they occur. These risks can affect both sides of the balance sheet, and require asset management, liability management, and valuation skills. Analytical skills, business knowledge and understanding of human behavior and the vagaries of information systems are required to design and manage programs that control risk (Be An Actuary 2005). This article needs additional references or sources for verification. ... Investment management is the professional management of various securities (shares, bonds etc) assets (e. ... In the most general sense, a liability is anything that is a hindrance, or puts individuals at a disadvantage. ...

Actuaries' insurance disciplines may be classified as life; health; pensions, annuities, and asset management; social welfare programs; property; casualty; general insurance; and reinsurance. Life, health, and pension actuaries deal with mortality risk, morbidity, and consumer choice regarding the ongoing utilization of drugs and medical services risk, and investment risk. Products prominent in their work include life insurance, annuities, pensions, mortgage and credit insurance, short and long term disability, and medical, dental, health savings accounts and long term care insurance. In addition to these risks, social insurance programs are greatly influenced by public opinion, politics, budget constraints, changing demographics and other factors such as medical technology, inflation and cost of living considerations (Bureau of Labor Statistics 2006). Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. ... Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the policy owners death. ... Mathematical finance is the branch of applied mathematics concerned with the financial markets. ... Social security primarily refers to social welfare service concerned with social protection, or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. ... Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. ... Casualty insurance is a broad category of insurance that includes almost any coverage that is not related to life, health, or property. ... General insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. ... Reinsurance is a means by which an insurance company can protect itself against the risk of losses with other insurance companies. ... In medicine, epidemiology and actuarial science, the term morbidity can refer to the state of being diseased (from Latin morbidus: sick, unhealthy), the degree or severity of a disease, the prevalence of a disease: the total number of cases in a particular population at a particular point in time, the... Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the policy owners death. ... Annuity contracts are offered by organizations and individuals that may accumulate value and take a current value and pay it out over a period of years. ... This article does not cite any references or sources. ... It has been suggested that this article or section be merged with Mortgage. ... Credit Insurance is an insurance policy associated with a specific loan or line of credit which pays back some or all of any money owed should certain things happen to the borrower, such as death, disability, or unemployment. ... Look up disability in Wiktionary, the free dictionary. ... Health insurance is a form of group insurance, where individuals pay premiums or taxes in order to help protect themselves from high or unexpected healthcare expenses. ... A Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). ... Long-term care (LTC) is a variety of services which help meet both the medical and non-medical need of people with a chronic illness or disability who cannot care for themselves for long periods of time. ... Social security primarily refers to social welfare service concerned with social protection, or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. ... Public Opinion is a book on media and democracy by Walter Lippmann. ... For other uses, see Politics (disambiguation). ... Demographics refers to selected population characteristics as used in government, marketing or opinion research, or the demographic profiles used in such research. ... Medical technology refers to the diagnostic or therapeutic application of science and technology to improve the management of health conditions. ... A cost-of-living index measures the cost of goods and services, typically over time. ...

Casualty actuaries, also known as non-life or general insurance actuaries, deal with catastrophic, unnatural risks that can occur to people or property. Products prominent in their work include auto insurance, homeowners insurance, commercial property insurance, workers’ compensation, title insurance, malpractice insurance, products liability insurance, directors and officers liability insurance, environmental and marine insurance, terrorism insurance and other types of liability insurance. Reinsurance products have to accommodate all of the previously mentioned products, and in addition have to properly reflect the increasing long term risks associated with climate change, cultural litigiousness, acts of war, terrorism and politics (Bureau of Labor Statistics 2006). General insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... Home insurance, also commonly called hazard insurance or homeowners insurance (often abbreviated in the real estate industry as HOI), is the type of property insurance that covers private homes. ... Workers compensation (colloquially known as workers comp in North American English or compo in Australian English) provides insurance to cover medical care and compensation for employees who are injured in the course of employment, in exchange for mandatory relinquishment of the employees right to sue their employer for the... Title insurance is insurance against loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. ... For other uses, see Malpractice (disambiguation). ... Products liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause. ... Directors and officers liability insurance - Wikipedia, the free encyclopedia /**/ @import /skins-1. ... Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities. ... Liability insurance is a part of the general insurance system of risk transference. ... Reinsurance is a means by which an insurance company can protect itself against the risk of losses with other insurance companies. ... Variations in CO2, temperature and dust from the Vostok ice core over the last 450,000 years For current global climate change, see Global warming. ... For other uses, see War (disambiguation). ... Terrorist redirects here. ...

In 2002, a Wall Street Journal survey on the best jobs in the United States listed actuary as the second best job, while in previous editions of the list, actuaries had been the top rated job (Lee 2002). The survey used six key criteria to rank jobs: environment, income, employment outlook, physical demands, security and stress. A similar survey by U.S. News & World Report in 2006 included actuaries among the 25 "Best Professions" that it expects will be in great demand in the future (Nemko 2006). The Wall Street Journal (WSJ) is an international daily newspaper published by Dow Jones & Company in New York City, New York, USA, with Asian and European editions, and a worldwide daily circulation of more than 2 million as of 2006, with 931,000 paying online subscribers. ... U.S. News & World Report is a weekly newsmagazine. ...

History

Need for insurance

The basic requirements of communal interests gave rise to risk sharing since the dawn of civilization. For example, people who lived their entire lives in a camp had the risk of fire, which would leave their band or family without shelter. After basic exchange came into existence, more complex forms developed beyond a basic barter economy, and new forms of risk manifested. Merchants embarking on trade journeys bore the risk of losing goods entrusted to them, their own possessions, or even their lives. Intermediaries developed to warehouse and trade goods, and they often suffered from financial risk. The primary providers in any extended families or household always ran the risk of premature death, disability or infirmity, leaving their dependents to starve. Credit procurement was difficult if the lender worried about repayment in the event of the borrower's death or infirmity. Alternatively, people sometimes lived too long, exhausting their savings, if any, or becoming a burden on others in the extended family or society (Faculty and Institute of Actuaries 2004). Central New York City. ... Look up exchange in Wiktionary, the free dictionary. ... Barter is a type of trade that do not use any medium of exchange, in which goods or services are exchanged for other goods and/or services. ... Merchants function as professionals who deal with trade, dealing in commodities that they do not produce themselves, in order to produce profit. ... An intermediary is a third party that offers intermediation services between two trading parties. ... In essence financial risk is any risk associated with money. ... Credit as a financial term, used in such terms as credit card, refers to the granting of a loan and the creation of debt. ... ...

Early attempts

In the ancient world there was not always room for the sick, suffering, disabled, aged, or the poor—these were often not part of the cultural consciousness of societies (Perkins 1995). Early methods of protection, aside from the normal support of the extended family, involved charity; religious organizations or neighbors would collect for the destitute and needy. By the middle of the third century, 1,500 suffering people were being supported by charitable operations in Rome (Perkins 1995). Charitable protection is still an active form of support to this very day (Tong 2006). However, receiving charity is uncertain and is often accompanied by social stigma. Elementary mutual aid agreements and pensions did arise in antiquity (Thucydides c. 431BCE). Early in the Roman empire, associations were formed to meet the expenses of burial, cremation, and monuments—precursors to burial insurance and friendly societies. A small sum was paid into a communal fund on a weekly basis, and upon the death of a member, the fund would cover the expenses of rites and burial. These societies sometimes sold shares in the building of columbāria, or burial vaults, owned by the fund—the precursor to mutual insurance companies (Johnston 1903, §475–§476). Other early examples of mutual surety and assurance pacts can be traced back to various forms of fellowship within the Saxon clans of England and their Germanic forbears, and to Celtic society (Loan 1992). However, many of these earlier forms of surety and aid would fail due to lack of understanding and knowledge (Faculty and Institute of Actuaries 2004). The French social theorist Émile Durkheim (1858-1917) used the term collective consciousness in his The Rules of Sociological Method (1895), Suicide (1897), and The Elementary Forms of Religious Life (1912). ... This article is about charitable organizations. ... Religious activities generally need some infrastructure to be conducted. ... Ancient Rome was a civilization that grew from a small agricultural community founded on the Italian Peninsula circa the 9th century BC to a massive empire straddling the Mediterranean Sea. ... Social stigma is severe social disapproval of personal characteristics or beliefs that are against cultural norms. ... The term mutual aid has multiple meanings: Mutual aid, a tenet of anarchist thought Mutual aid, an agreement between emergency responders Mutual Aid: A Factor of Evolution, a book by anarchist Peter Kropotkin Mutual aid, in social work with groups Category: ... For other uses, see Roman Empire (disambiguation). ... Burial societies are a form of friendly society. ... A friendly society (sometimes called a mutual society, benevolent society or fraternal organization) is a mutual association for insurance-like purposes, and often, especially in the past, serving ceremonial and friendship purposes also. ... Columbarium niches built into the side of St. ... Mutual insurance is a type of insurance where those protected by the insurance (policyholders) also own the organization. ... A surety is a person who agrees to be responsible for the debt or obligation of another. ... Assurance has been defined by the American Institute of Certified Public Accountants (AICPA) as Independent Professional Services that improve information quality or its context. Such services are very broad and could include assessments of internet security and quality of health facilities. ...

Development of theory

2003 US mortality (life) table, Table 1, Page 1

The 17th century was a period of extraordinary advances in mathematics in Germany, France, and England. At the same time there was a rapidly growing desire and need to place the valuation of personal risk on a more scientific basis. Independently from each other, compound interest was studied and probability theory emerged as a well understood mathematical discipline. Another important advance came in 1662 from a London draper named John Graunt, who showed that there were predictable patterns of longevity and death in a defined group, or cohort, of people, despite the uncertainty about the future longevity or mortality of any one individual person. This study became the basis for the original life table. It was now possible to set up an insurance scheme to provide life insurance or pensions for a group of people, and to calculate with some degree of accuracy how much each person in the group should contribute to a common fund assumed to earn a fixed rate of interest. The first person to demonstrate publicly how this could be done was Edmond Halley. In addition to constructing his own life table, Halley demonstrated a method of using his life table to calculate the premium someone of a given age should pay to purchase a life-annuity (Halley 1693). Image File history File links Download high resolution version (900x1189, 108 KB) Summary Licensing File links The following pages on the English Wikipedia link to this file (pages on other projects are not listed): Actuary Actuarial science Life table ... Image File history File links Download high resolution version (900x1189, 108 KB) Summary Licensing File links The following pages on the English Wikipedia link to this file (pages on other projects are not listed): Actuary Actuarial science Life table ... 2003 US mortality table, Table 1, Page 1 In actuarial science, a life table (also called a mortality table or actuarial table) is a table which shows, for a person at each age, what the probability is that they die before their next birthday. ... Compound interest refers to the fact that whenever interest is calculated, it is based not only on the original principal, but also on any unpaid interest that has been added to the principal. ... Probability theory is the branch of mathematics concerned with analysis of random phenomena. ... This article is about the capital of England and the United Kingdom. ... Draper is the now largely obsolete term for a merchant in cloth or dry goods, though often used specifically for one who owns or works in a drapers shop or store. ... John Graunt (1620-1674) was one of the first demographers. ... For other meanings see cohort In statistics and demography, a cohort is a group of subjects — most often humans from a given population — defined by a condition on their date of birth. ... 2003 US mortality table, Table 1, Page 1 In actuarial science, a life table (also called a mortality table or actuarial table) is a table which shows, for a person at each age, what the probability is that they die before their next birthday. ... // Portrait of Edmond Halley painted around 1687 by Thomas Murray (Royal Society, London) Portrait of Edmond Halley Bust of Edmond Halley in the Museum of the Royal Greenwich Observatory Edmond Halley FRS (sometimes Edmund; IPA: ) (November 8, 1656 – January 14, 1742) was an English astronomer, geophysicist, mathematician, meteorologist, and physicist. ... Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. ...

Early actuaries

James Dodson’s pioneering work on the level premium system led to the formation of the Society for Equitable Assurances on Lives and Survivorship (now commonly known as Equitable Life) in London in 1762. This was the first life insurance company to use premium rates which were calculated scientifically for long-term life policies, using Dodson’s work. The company still exists, though it has run into difficulties recently. After Dodson’s death in 1757, Edward Rowe Mores took over the leadership of the group that eventually became the Society for Equitable Assurances in 1762. It was he who specified that the chief official should be called an ‘actuary’ (Ogborn, 1956). Previously, the use of the term had been restricted to an official who recorded the decisions, or ‘acts’, of ecclesiastical courts, in ancient times originally the secretary of the Roman senate, responsible for compiling the Acta Senatus (Faculty and Institute of Actuaries 2004). Other companies which did not originally use such mathematical and scientific methods most often failed or were forced to adopt the methods pioneered by Equitable (Bühlmann 1997 p. 166). James Dodson FRS (c. ... The Equitable Life Assurance Society (Equitable Life), founded 1762, is a life insurance company in the United Kingdom. ... Edward Rowe Mores (1731–1778), is believed to be the first person to use the title actuary in relation to insurance mathematicians. ... The Roman Senate (Latin: Senatus) was the main governing council of both the Roman Republic, which started in 509 BC, and the Roman Empire. ... Acta Senatus, or Commentarii Senatus, are minutes of the discussions and decisions of the Roman Senate. ...

Development of the modern profession

Main article: Actuarial science

In the eighteenth and nineteenth centuries, computational complexity was limited to manual calculations. The actual calculations required to compute fair insurance premiums are rather complex. The actuaries of that time developed methods to construct easily-used tables, using sophisticated approximations called commutation functions, to facilitate timely, accurate, manual calculations of premiums (Slud 2006). Over time, actuarial organizations were founded to support and further both actuaries and actuarial science, and to protect the public interest by ensuring competency and ethical standards (Hickman 2004 p. 4). However, calculations remained cumbersome, and actuarial shortcuts were commonplace. Non-life actuaries followed in the footsteps of their life compatriots in the early twentieth century. The 1920 revision to workers compensation rates took over two months of around-the-clock work by day and night teams of actuaries (Michelbacher 1920 p. 224, 230). In the 1930s and 1940s, however, rigorous mathematical foundations for stochastic processes were developed (Bühlmann 1997 p. 168). Actuaries could now begin to forecast losses using models of random events instead of deterministic methods. Computers further revolutionized the actuarial profession. From pencil-and-paper to punchcards to microcomputers, the modeling and forecasting ability of the actuary has grown exponentially (MacGinnitie 1980 p.50–51). 2003 US mortality (life) table, Table 1, Page 1 Actuarial science applies mathematical and statistical methods to finance and insurance, particularly to the assessment of risk. ... (17th century - 18th century - 19th century - more centuries) As a means of recording the passage of time, the 18th century refers to the century that lasted from 1701 through 1800. ... Alternative meaning: Nineteenth Century (periodical) (18th century — 19th century — 20th century — more centuries) As a means of recording the passage of time, the 19th century was that century which lasted from 1801-1900 in the sense of the Gregorian calendar. ... 2003 US mortality (life) table, Table 1, Page 1 Actuarial science applies mathematical and statistical methods to finance and insurance, particularly to the assessment of risk. ... (19th century - 20th century - 21st century - more centuries) Decades: 1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s As a means of recording the passage of time, the 20th century was that century which lasted from 1901–2000 in the sense of the Gregorian calendar (1900–1999... Stochastic, from the Greek stochos or goal, means of, relating to, or characterized by conjecture; conjectural; random. ... The term deterministic may refer to: the more general notion of determinism from philosophy, see determinism a type of algorithm as discussed in computer science, see deterministic algorithm scientific determinism as used by Karl Popper and Stephen Hawking deterministic system in mathematics deterministic system in philosophy deterministic finite state machine...

Another modern development is the convergence of modern financial theory with actuarial science (Bühlmann 1997 p. 169–171). In the early twentieth century, actuaries were developing many techniques that can be found in modern financial theory, but for various historical reasons, these developments did not achieve much recognition (Whelan 2002). However, in the late 1980s and early 1990s, there was a distinct effort for actuaries to combine financial theory and stochastic methods into their established models (D’arcy 1989). Today, the profession, both in practice and in the educational syllabi of many actuarial organizations, combines tables, loss models, stochastic methods, and financial theory (Feldblum 2001 p. 8–9), but is still not completely aligned with modern financial economics (Bader & Gold 2003 p. 1–39). Finance theory is the field that deals with investment making decisions and the concept of the time value of money. ... Financial economics is the branch of economics concerned with resource allocation over time. ...

Responsibilities

Actuaries use skills in mathematics, economics, finance, probability and statistics, and business to help businesses assess the risk of certain events occurring, and to formulate policies that minimize the cost of that risk. For this reason, actuaries are essential to the insurance and reinsurance industry, either as staff employees or as consultants, as well as to government agencies such as the Government Actuary’s Department in the UK or the Social Security Administration in the US. Actuaries assemble and analyze data to estimate the probability and likely cost of the occurrence of an event such as death, sickness, injury, disability, or loss of property. Actuaries also address financial questions, including those involving the level of pension contributions required to produce a certain retirement income and the way in which a company should invest resources to maximize its return on investments in light of potential risk. Using their broad knowledge, actuaries help design and price insurance policies, pension plans, and other financial strategies in a manner which will help ensure that the plans are maintained on a sound financial basis (Bureau of Labor Statistics 2006). For other meanings of mathematics or uses of math and maths, see Mathematics (disambiguation) and Math (disambiguation). ... Face-to-face trading interactions on the New York Stock Exchange trading floor. ... Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ... Probability is the likelihood that something is the case or will happen. ... This article is about the field of statistics. ... In economics, a business is a legally-recognized organizational entity existing within an economically free country designed to sell goods and/or services to consumers, usually in an effort to generate profit. ... A consultant is a professional that provides expert advice in a particular domain or area of expertise such as accountancy, information technology, the law, human resources, marketing, medicine, finance or more esoteric areas of knowledge, for example engineering and scientific specialties such as materials science, instrumentation, avionics, and stress analysis. ... The Government Actuary’s Department (GAD) is a department of the Government of the United Kingdom responsible for providing actuarial advice to public sector clients. ... The United States Social Security Administration (or SSA[1]) is an independent agency of the United States government established by a law currently codified at 42 U.S.C. Â§ 901. ...

Traditional employment

On both the life and casualty sides, the classical function of actuaries is to calculate premiums and reserves for insurance policies covering various risks. Premiums are the amount of money the insurer needs to collect from the policyholder in order to cover the expected losses, expenses, and a provision for profit. Reserves are provisions for future liabilities and indicate how much money should be set aside now to reasonably provide for future payouts. If you inspect the balance sheet of an insurance company, you will find that the liability side consists mainly of reserves.

On the casualty side, this analysis often involves quantifying the probability of a loss event, called the frequency, and the size of that loss event, called the severity. Further, the amount of time that occurs before the loss event is also important, as the insurer will not have to pay anything until after the event has occurred. On the life side, the analysis often involves quantifying how much a potential sum of money or a financial liability will be worth at different points in the future. Since neither of these kinds of analysis are purely deterministic processes, stochastic models are often used to determine frequency and severity distributions and the parameters of these distributions. Forecasting interest yields and currency movements also plays a role in determining future costs, especially on the life side. The term deterministic may refer to: the more general notion of determinism from philosophy, see determinism a type of algorithm as discussed in computer science, see deterministic algorithm scientific determinism as used by Karl Popper and Stephen Hawking deterministic system in mathematics deterministic system in philosophy deterministic finite state machine... Stochastic, from the Greek stochos or goal, means of, relating to, or characterized by conjecture; conjectural; random. ... In statistics, a frequency distribution is a list of the values that a variable takes in a sample. ... The factual accuracy of this article is disputed. ...

Actuaries do not always attempt to predict aggregate future events. Often, their work may relate to determining the cost of financial liabilities that have already occurred, called retrospective reinsurance, or the development or re-pricing of new products. Reinsurance is a means by which an insurance company can protect itself against the risk of losses with other insurance companies. ...

Actuaries also design and maintain products and systems. They are involved in financial reporting of companies’ assets and liabilities. They must communicate complex concepts to clients who may not share their language or depth of knowledge. Actuaries work under a strict code of ethics that covers their communications and work products, but their clients may not adhere to those same standards when interpreting the data or using it within different kinds of businesses.

Non-traditional employment

Many actuaries are general business managers or financial officers. They analyze prospective business prospects with their financial skills in valuing or discounting risky future cash flows, and many apply their pricing expertise from insurance to other lines of business. Some actuaries act as expert witnesses by applying their analysis in court trials to estimate the economic value of losses such as lost profits or lost wages. An expert witness is a witness, who by virtue of education, profession, publication or experience, is believed to have special knowledge of his or her subject beyond that of the average person, sufficient that others may officially (and legally) rely upon his opinion. ...

There has been a recent widening of the scope of the actuarial field to include investment advice and asset management. Further, there has been a convergence from the financial fields of risk management and quantitative analysis with actuarial science. Now, actuaries also work as risk managers, quantitative analysts, or investment specialists. Even actuaries in traditional roles are now studying and using the tools and data previously in the domain of finance (Feldblum 2001 p. 8). One of the latest developments in the industry, insurance securitization, requires both the actuarial and finance skills (Krutov 2006). Invest redirects here. ... Asset management is the method that a company uses to track fixed assets, for example factory equipment, desks and chairs, computers, even buildings. ... For non-business risks, see risk or the disambiguation page risk analysis. ... Quantitative analysis has different meanings in different contexts. ... 2003 US mortality (life) table, Table 1, Page 1 Actuarial science applies mathematical and statistical methods to finance and insurance, particularly to the assessment of risk. ...

Another field in which actuaries are becoming more prominent is that of Enterprise Risk Management, for both financial and non-financial corporations (D’arcy 2005). For example, the Basel II accord for financial institutions, and its analogue, the Solvency II accord for insurance companies, requires such institutions to account for operational risk separately and in addition to credit, reserve, asset, and insolvency risk. Actuarial skills are well suited to this environment because of their training in analyzing various forms of risk, and judging the potential for upside gain, as well as downside loss associated with these forms of risk (D’arcy 2005). In business Enterprise Risk Management (ERM) are the methods and processes used to manage those risks, possible events or circumstances that can have influence on the enterprise in question. ... -1... According to §644 of International Convergence of Capital Measurement and Capital Standards, known as Basel II, operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. ... Credit risk is the risk of loss due to a debtors non-payment of a loan or other line of credit (either the principal or interest (coupon) or both). ... An actuarial reserve is a liability equal to the present value of the future expected cash flows of a contingent event. ... This article is about the business definition. ... Insolvency is a financial condition experienced by a person or business entity when their assets no longer exceed their liabilities (commonly referred to as balance-sheet insolvency) or when the person or entity can no longer meet its debt obligations when they come due (commonly referred to as cash-flow...

Remuneration

The credentialing and examination procedure for becoming a fully qualified actuary can be discouraging. Consequently, the profession remains very small throughout the world. As a result, actuaries are in high demand, and they are highly paid for the services they render (D.W. Simpson 2006). In the UK, where there are approximately 8,000 fully qualified actuaries, typical post-university starting salaries range between GBP £24,000 and £30,000 (approx. US$44,000–US$55,000 c. June 2006) and newly qualified actuaries in insurance companies earn somewhere between £44,000 and £64,000 (approx. US$81,000–US$118,000 c. June 2006) per year. Many successful actuaries earn over £100,000 a year (approx. US$185,000 c. June 2006) (Dixon 2004). GBP redirects here. ... USD redirects here. ...

In developing markets such as India, annual compensation for newly qualified actuaries starts at around 8 lakh (800,000 Indian rupees or approximately US$17,500 c. June 2006) and can go as high as 20 lakh (approx. US$43,600 c. June 2006) (Bimaonline.com 2003). A lakh (Hindi/Nepali : लाख, Urdu: Ù„Ú©Ú¾, Bengali: , Telugu : లక్ష, Tamil : இலட்சம்) is a unit in the Indian numbering system, widely used both in official and other contexts in Bangladesh, India, Nepal, Sri Lanka, Myanmar and Pakistan. ... “INR” redirects here. ...

Credentialing and exams

Becoming a fully credentialed actuary requires passing a rigorous series of exams, usually taking several years. In some countries, such as France, most study takes place in a university setting. In others, such as the U.S. and the UK, most study takes place during employment.

UK and Republic of Ireland

Qualification in the United Kingdom and the Republic of Ireland consists of a combination of exams and courses provided by the professional bodies, the Institute of Actuaries based in London, England, and the Faculty of Actuaries based in Edinburgh, Scotland—separate but coinciding bodies. No geographic limitations exist for these bodies. Students and actuaries in any part of the UK or the Republic of Ireland may be a member of either or both bodies. The exams may only be taken upon having officially joined the body, unlike many other countries where exams may be taken earlier. However, a candidate may offer proof of having previously covered topics, usually while at university, in order to be exempt from taking certain subjects. The exams themselves are now split into four sections: Core Technical (CT), Core Applications (CA), Specialist Technical (ST), and Specialist Applications (SA). For students that joined the Profession after June 2004, a further requirement that the student carry out a "Work-based skills" exercise has been brought into effect. This involves the student submitting a series of essays to the Profession detailing the work that he or she has been involved in. In addition to exams, essays and courses, it is required that the candidate have at least three years' experience of actuarial work under supervision of a recognized actuary for him or her to qualify as a “Fellow of the (Institute/Faculty) of Actuaries” (FIA/FFA) (Faculty and Institute of Actuaries 2006). The Institute of Actuaries is one of the two professional bodies representing actuaries in the United Kingdom. ... This article is about the capital of England and the United Kingdom. ... For other uses, see England (disambiguation). ... The Faculty of Actuaries is one of the two professional bodies representing actuaries in the United Kingdom. ... For other uses, see Edinburgh (disambiguation). ... This article is about the country. ...

Actuaries can also gain partial credit towards Fellowship of either the Faculty or Institute of Actuaries by following an actuarial science degree at an accredited university. At the undergraduate level the only accredited programmes are currently at Heriot-Watt University, Edinburgh, Swansea University, City University, London, and the University of Kent. Full-time accredited masters programmes are also Heriot-Watt, Kent and City and part-time accredited masters degrees are offered by Imperial College, and the University of Leicester. Actuarial programmes that offer the possibility of exemption from individual professional exams are also available at the London School of Economics, University of Southampton, and the University of Kent. In the Republic of Ireland exemptions are offered by University College Dublin and Dublin City University. 2003 US mortality (life) table, Table 1, Page 1 Actuarial science applies mathematical and statistical methods to finance and insurance, particularly to the assessment of risk. ... The entrance to main reception at the Edinburgh campus. ... City University London is a British university based at Northampton Square in Clerkenwell, London (). Its official name is The City University. ... Affiliations University Alliance Association of Commonwealth Universities European University Association Website http://www. ... Royal School of Mines Entrance Imperial College London is a college of the University of London which focuses on science and technology, and is located in South Kensington in London. ... University of Leicester seen from Victoria Park - Left to right: the Department of Engineering, the Attenborough tower, the Charles Wilson building. ... Mascot: Beaver Affiliations: University of London Russell Group EUA ACU CEMS APSIA Universities UK U8 Golden Triangle G5 Group Website: http://www. ... The University of Southampton is a university situated in the city of Southampton, on the south coast of Great Britain. ... Affiliations University Alliance Association of Commonwealth Universities European University Association Website http://www. ... University College Dublin - National University of Ireland, Dublin - more commonly University College Dublin (UCD) - is Irelands largest university, with over 20,000 students. ... Dublin City University (DCU) is a university situated between Glasnevin and Whitehall on the Northside of Dublin in Ireland. ...

United States

In the U.S., for life, health, and pension actuaries, exams are given by the Society of Actuaries, while for property and casualty actuaries the exams are administered by the Casualty Actuarial Society. The Society of Actuaries’ membership requirements include passing six examinations for Associateship, and an additional two exams, together with the completion of a professional paper, for Fellowship (SOA 2006). The Casualty Actuary Society requires the successful completion of seven examinations for Associateship and two additional exams for Fellowship. In addition to these requirements, casualty actuarial candidates must also complete professionalism education and be recommended for membership by existing members (CAS 2006). The Society of Actuaries is a professional society of actuaries in the United States. ... The Casualty Actuarial Society (CAS) is a professional society of actuaries. ...

In order to sign statements of actuarial opinion, however, American actuaries must be members of the American Academy of Actuaries. Academy membership requirements include membership in one of the recognized actuarial societies, at least three years of full-time equivalent experience in responsible actuarial work, and either residency in the United States for at least three years or a non-resident or new resident who meets certain requirements (AAA 2006). Continuing education is required after certification for all actuaries who sign statements of actuarial opinion (AAA 2001). To meet Wikipedias quality standards, this article or section may require cleanup. ...

In the pension area, American actuaries must pass three examinations to become an Enrolled Actuary. Some pension-related filings to the Internal Revenue Service and the Pension Benefit Guaranty Corporation require the signature of an Enrolled Actuary. Many Enrolled Actuaries belong to the Conference of Consulting Actuaries or the American Society of Pension Professionals and Actuaries. An Enrolled Actuary is an actuary who has been licensed by a Joint Board of the Department of Treasury & Department of Labor in the U.S. to perform a variety of actuarial tasks that are required for pension plans in the U.S, according to Employee Retirement Income Security Act... Seal of the Internal Revenue Service Tax rates around the world Tax revenue as % of GDP Part of the Taxation series        IRS redirects here. ... The Pension Benefit Guaranty Corporation (or PBGC) is an independent agency of the United States government created by the Employee Retirement Income Security Act of 1974 (ERISA) to encourage the continuation and maintenance of voluntary private pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance... Logo of the CCA The Conference of Consulting Actuaries, also known as the Conference or the CCA, is a professional society of actuaries engaged in consulting in the United States and Canada, as opposed to those employed by insurance companies. ... Logo of the ASPPA The American Society of Pension Professionals and Actuaries or ASPPA is the professional organization for American actuaries (Enrolled Actuary) that deal with pensions. ...

Canada

The Canadian Institute of Actuaries (the CIA) recognizes fellows of both the Society of Actuaries and the Casualty Actuary Society, provided that they have specialized study in Canadian actuarial practice. For fellows of the SOA, this is fulfilled by taking the CIA’s Practice Education Course (PEC). For fellows of the Casualty Actuarial Society, this is fulfilled by taking exam 7C (Canada) instead of exam 7US. Unlike their American counterparts, the CIA only has one class of actuary—Fellow. Further, the CIA requires three years of actuarial practice within the previous decade, and 18 months of Canadian actuarial practice within the last three years, to become a fellow (CIA 2004). The Canadian Institute of Actuaries is the national organization of the actuarial profession in Canada. ...

Sweden

Actuarial training in Sweden takes place at Stockholm University. The four year master's program covers the subjects mathematics, mathematical statistics, insurance mathematics, financial mathematics, insurance law and insurance economics. The program operates under the Division of Mathematical Statistics (Stockholm University 2006). Stockholm University (Stockholms universitet) is a state university in Stockholm, Sweden. ... This article does not cite any references or sources. ... For other meanings of mathematics or uses of math and maths, see Mathematics (disambiguation) and Math (disambiguation). ... This article is about the field of statistics. ... 2003 US mortality (life) table, Table 1, Page 1 Actuarial science applies mathematical and statistical methods to finance and insurance, particularly to the assessment of risk. ... Mathematical finance is the branch of applied mathematics concerned with the financial markets. ... For other uses, see Law (disambiguation). ... Face-to-face trading interactions on the New York Stock Exchange trading floor. ...

Denmark

In Denmark it normally takes five years of study at the University of Copenhagen to become an actuary with no professional experience requirement. There is a focus on statistics and probability theory, and a requirement for a master's thesis (Norberg 1990). By Danish law, responsibility for the practise of any life insurance business must be taken by a formally acknowledged and approved actuary. In order to be approved as a formally responsible actuary, three to five years of professional experience is required (Haastrup and Nielsen). Main campus on Frue Plads. ... This article is about the field of statistics. ... Probability theory is the branch of mathematics concerned with analysis of random phenomena. ... This article does not cite any references or sources. ... This article is about the thesis in academia. ...

Australia

The education system in Australia is divided into five parts. The first three are exam-based curricula, and the final two require a professionalism course and work experience (IAA-Ed 2006).

Part I relies on exemptions from an accredited under-graduate degree from either Macquarie University, University of New South Wales, University of Melbourne or Australian National University (IAA-Part I 2006). The courses would cover subjects including finance, financial mathematics, economics, contingencies, demography, models, probability and statistics. Students may also gain exemptions by passing the exams of the Institute of Actuaries in London (IAA-Part I 2006). Macquarie University is an Australian university located in Sydney. ... Uniwalk is the main walkway stretching through the whole Kensingtion campus The University of New South Wales, also known as UNSW or colloquially as New South, is a university situated in Kensington, a suburb in Sydney, New South Wales, Australia. ... The University of Melbourne, is a public university located in Melbourne, Victoria. ... The Australian National University, or ANU, is a public university located in Canberra, Australia. ... The Institute of Actuaries is one of the two professional bodies representing actuaries in the United Kingdom. ...

Part II is the Actuarial Control Cycle and is offered by the 4 universities above (IAA-Part II 2006).

Part III consists of 4 half-year courses of which two are compulsory and the other two allow specialization (IAA-Part III 2006).

India

The Actuarial Society of India offers both associateship and fellowship classes of membership. However, prospective candidates must be admitted to the society as students before they achieve associateship or fellowship. The exam sequence is similar to the British model, with Core and Specialty technical and application exams. The exams are conducted twice a year during the months of May-June and October-November (ASI 2006). The Actuarial Society of India, known as the ASI, is the sole professional body of actuaries in India, and was formed in September of 1944. ...

Other countries

Many other countries pattern their requirements after the larger societies of the US or UK. In general, the websites of these organizations are often the easiest source for finding out about membership requirements.

Exam support

As these qualifying exams are rigorous, support is usually available to people progressing through the exams. Often, employers provide paid on-the-job study time and paid attendance at seminars designed for the exams (Be An Actuary 2005). Also, many companies which employ actuaries have automatic pay raises or promotions when exams are passed. As a result, actuarial students have strong incentives for devoting adequate study time during off-work hours. A common rule of thumb for exam students is that roughly 400 hours of study time are necessary for each four-hour exam (Sieger 1998). Thus, thousands of hours of study time should be anticipated over several years, assuming no failures (Feldblum 2001 p. 6). In practice, as the historical passing percentages remain below 50% for these exams, the “travel time” to credentialing is extended and more study time is needed. This process resembles formal schooling, so that actuaries who are sitting for exams are still called “students” or “candidates” despite holding important positions with substantial responsibilities.

Notable actuaries

James Dodson 

Head of the Royal Mathematical School, and Stone's School, Dodson built on the statistical mortality tables developed by Edmund Halley in 1693 (Faculty and Institute of Actuaries 2004).

Edmond Halley 

While Halley actually predated much of what is now considered the start of the actuarial profession, he was the first to mathematically and statistically rigorously calculate premiums for a life insurance policy (Halley 1693).

Edward Rowe Mores 

First person to use the title ‘actuary’ with respect to a business position (Ogborn, 1956).

William Morgan 

Morgan was the appointed Actuary of the Society for Equitable Assurances in 1775. He expanded on Mores's and Dodson's work, and may be rightly considered the father of the actuarial profession in that his title became applied to the field as a whole.(Faculty and Institute of Actuaries 1973).

Maurice Princet 

French actuary and close associate of artist Pablo Picasso. Princet is considered "Le Mathématicien du Cubisme" ("The Mathematician of Cubism") for his "critical influence on Picasso’s development as an artist at the birth of cubism" (Boyle 2002).

Frank Redington 

Developed the Redington Immunization Theory

Isaac M. Rubinow 

Founder and first president of the Casualty Actuarial Society (CAS 2006).

Elizur Wright 

American actuary and abolitionist, professor of mathematics at Western Reserve College (Ohio). He campaigned for laws that required life insurance companies to hold sufficient reserves to guarantee that policies would be paid (Stearns 1905).

James Dodson FRS (c. ... // Portrait of Edmond Halley painted around 1687 by Thomas Murray (Royal Society, London) Portrait of Edmond Halley Bust of Edmond Halley in the Museum of the Royal Greenwich Observatory Edmond Halley FRS (sometimes Edmund; IPA: ) (November 8, 1656 – January 14, 1742) was an English astronomer, geophysicist, mathematician, meteorologist, and physicist. ... Edward Rowe Mores (1731–1778), is believed to be the first person to use the title actuary in relation to insurance mathematicians. ... William Morgan, born Bridgend, Glamorganshire, 1750, died 1833. ... Picasso redirects here. ... Pablo Picasso, Le guitariste, 1910 Juan Gris, Portrait of Picasso, 1912, oil on canvas Georges BraqueWoman with a guitar, 1913 Juan Gris, Still Life with Fruit Dish and Mandolin, 1919, oil on canvas Cubist villa in Prague, Czech Republic Cubist House of the Black Madonna, Prague, Czech Republic, 1912 Cubism... Frank Mitchell Redington (10 May 1906 - 23 May 1984) was a noted British actuary. ... Isaac M. Rubinow (1875 – 1936) was a leading theorist on social insurance and one of the most influential writers on the subject. ... The Casualty Actuarial Society (CAS) is a professional society of actuaries. ... Elizur Wright (1804-1885) is sometimes called the father of life insurance, In 1829, he became Professor of Mathematics at Western Reserve College in Ohio. ...

Fictional actuaries

Main article: Fictional actuaries

Due to the low public-profile of the job, some of the most recognisable actuaries to the general public happen to be characters in movies. Many actuaries were unhappy with the stereotypical portrayals of these actuaries as unhappy, math-obsessed and socially inept people; others have claimed that the portrayals are close to home, if a bit exaggerated. (Coleman 2003). // Actuaries in Film Double Indemnity (1944) a Billy Wilder film , with Fred MacMurray and Barbara Stanwyck, was possibly the first to feature an actuary. ...

See also

• Category:Actuarial associations
• Category:Actuarial science

External links

Look up Actuary in
Wiktionary, the free dictionary.

• Be An Actuary
• Global actuarial disscussion forum
• Actuarial Wiki

Wikipedia does not have an article with this exact name. ... Wiktionary (a portmanteau of wiki and dictionary) is a multilingual, Web-based project to create a free content dictionary, available in over 151 languages. ...

References