What is the primary function of an actuary in insurance?

The primary function of an actuary in insurance revolves around analyzing statistical data and assessing risks. Actuaries use mathematics, statistics, and financial theory to evaluate the likelihood of future events—such as death, illness, accidents, or natural disasters—and their financial impact on an insurance company. This expertise is crucial in determining premium rates, setting reserves, and ensuring that the insurer can meet its future policyholder obligations.

By accurately assessing risks, actuaries influence the pricing of insurance products, ensuring that premiums are adequate to cover projected claims while remaining competitive in the market. This analytical role allows the insurer to maintain financial stability and sustainability over time. Other roles mentioned, like selling insurance policies, managing claims, or designing marketing strategies, do not directly align with the specialized skills and responsibilities typically handled by actuaries.