Actuarial Science
Introduction
Actuarial science is a discipline that applies mathematical and statistical methods to assess risk in insurance, finance, and other industries and professions. More generally, actuaries apply rigorous mathematics to model matters of uncertainty. Actuaries are professionals trained in this discipline. In many countries, actuaries must demonstrate their competence by passing a series of rigorous professional examinations.
History
The actuarial profession has its roots in the study of mortality and the financial risks associated with death. In the late 17th century, some of the first actuaries began to study mortality in order to provide accurate predictions for life insurance policies. The first actuarial society was established in London in 1848.
Mathematical Foundations
The mathematical foundation of actuarial science is probability theory, a branch of mathematics that deals with the analysis of random phenomena. Actuaries use probability theory to model and predict future events, such as the likelihood of an insurance claim being made.
Risk Theory
Risk theory is a fundamental part of actuarial science. It involves the study of the financial consequences of risk, and how to mitigate these risks through insurance and other financial products. Actuaries use risk theory to calculate premiums and reserves for insurance policies.
Actuarial Models
Actuarial models are mathematical models that actuaries use to calculate the financial implications of uncertain future events. These models are used in a variety of applications, including insurance, pensions, and investment.
Actuarial Examinations
In many countries, actuaries must pass a series of examinations in order to qualify as a professional actuary. These examinations cover a wide range of topics, including mathematics, statistics, economics, and finance.
Actuarial Profession
The actuarial profession is a highly respected and well-paid profession. Actuaries work in a variety of industries, including insurance, finance, and government. They are often involved in high-level decision-making and have a significant impact on the financial health of their organizations.