Risk management seeks to reduce the financial variability of the outcome for a specific area of risk.

Enterprise risk management looks at the risks of the entire organization, how the risks are related and affect each other, to try to reduce the risk as a whole.

In order to assess risk, actuaries must understand the risk, know what information is available about the risk, the likelihood and cost of the loss or destruction, and other important factors.  They also must be able to put a price tag on changes that can affect the price of the risk. 

Actuaries use math, primarily probability and statistics, to determine the price.  They apply their mathematical expertise, statistical knowledge, economic and financial knowledge to solve problems involving risk.  

As a result, actuaries are in an excellent position to measure the financial impact of changes that can increase or reduce the risk.

They accomplish this by:
     Identify the risk.  Actuaries obtain all the details and facts about the exposure that they can gather that are pertinent to the risk at hand, 
     Quantify the risk.  Actuaries determine how likely it will happen, what the cost will be if it does happen, and how the money will be paid out ( immediately, over time, or some of both.)
    Exploring ways of reducing the likelihood of the loss, its cost, or both.
    Observing the outcomes and modifying their mathematical models as more information becomes available.