Actuaries are really good at math, and they use math to evaluate the financial cost of future uncertain events.
They employ statistics and probability, knowledge of the circumstances of the situation, and business acumen to estimate the financial impact of the uncertain event – usually insurance or insurance like coverage.
Since some mathematical models work better than others for these exercises, the actuary is trained in these proven methods.
The function of the actuary is to enable management to make better decisions about what to charge the insurance customer, the timing and expected amounts of the insurance payments, what funds, (in the form of reserves) to set aside for losses that have happened but have not been settled, how much money needs to be set aside for the claims that are expected to happen in the future on the remaining portion of the policies that are currently in force, and so on.
Regulators often require the approval or opinion of a credentialed actuary for certain documents, including a Statement of Actuarial Opinion to accompany the Statutory Annual Accounting Statement.
The Chief Actuary is in charge of the items above, as well as leading the actuarial effort, which includes: · making certain the actuaries who work for the company are doing their job correctly, and consulting actuaries if the company uses them. · establishing standards and procedures for the actuarial work. · establishing quality standards for the information (data) used for that work. · making sure the actuaries activities are in sync with the activities of the other parts of the organization · making sure the company has enough money set aside to pay its claims
The Chief Actuary also brings the activities of the actuary to other areas of the company, usually by introducing actuarial and statistical activities to areas that will benefitl from them in a cost effective way.
Finally, as a member of executive management, the Chief Actuary ties all of it together.
