ACTUARIAL AND OTHER CERTIFICATIONS :
Who is an Actuary?
An actuary is an expert who applies mathematical and statistical methods for assessment of financial and other risks relating to various contingent events and for scientific valuation of financial products in the fields of insurance, retirement and other benefits, investments etc.
The Job
The Actuary designs insurance & pension plans. Also determines insurance premium rates and contract provisions for each type of policy offered, compiles data relating to rates of mortality, sickness, injury, retirement and property loss from accident, theft, fire or any other hazard. On the basis of data thus collected, he/she analyzes insurances’ claims from Corporation or Company. Also evolves new types of attractive policies ensuring greater business. An Actuary works in Insurance Companies, Banks, Stock Exchanges and other financial institutions controlled by Govt. & Private bodies.
An Actuary’s skills are used by the office of an insurance company to:
(1) Design an insurance product and set its price
(2) Select the right people for insurance products.
(3) Minimise the amount of losses for the company by reinsuring the company’s insurance policies with another insurer (called reinsurers)
(4) Maximize the profits for the company and thus protect the customers’ amounts kept with the insurance company for a number of years etc.
(5) Prepare on a given date a summary of the company’s liabilities (commitments)
(6) To determine the adequacy of the reserves.
(7) To certify the solvency of the Insurance Company.
He looks into the future financial prospects of an insurance company. The liabilities are expected death claims and other benefits payable by an insurer to the policy holders (purchasers of insurance contracts) in the future. The Actuary’s certificate indicates that the company is (not) solvent and can (not) meet varying payments due at any time in future. For others it is not easy to find whether an insurer is solvent or not. For an actuary, it is that difficult a job as he can use his professional skills to walk into the future and see how much income comes to the fund and how much expenses and benefit payments go out of the fund every year in future.