Actuarial science applies mathematical and statistical methods to finance and insurance, particularly to risk assessment. Actuaries are professionals who are qualified in this field through either examinations or university-based education (or both), and work experience.
Actuarial mathematics deal with the mathematics of uncertainty and risk. Some of the key areas where actuarial mathematics are principally applied are mortality studies, financial risk, risk and ruin theory, credibility theory, demography, reliability study and graduation of statistical data.
Actuarial science includes a number of interrelating disciplines, including probability and statistics, finance, and economics. Historically, actuarial science used deterministic models in the construction of tables and premiums. Modern approaches incorporate the stochastic simulation of random variables, such as interest rates.
Studying Actuarial Science
Studying Actuarial Science can be a task that is both challenging and rewarding. It requires a very good basis in mathematics as it requires heavy use of statistics. In the U.K., few universities offer an actuarial related degree. Among those, the Queen's University of Belfast, Heriot-Watt, City and Kent universities are some of them that can offer full exemptions from the CT series of examinations of the Institute or Faculty of Actuaries.
Actuaries are involved in the following areas :
- Life insurance
- Short term or general insurance
- Institutional investments