DEFINITION of 'Actuarial Science '
A discipline that assesses financial risks in the insurance and finance fields using mathematical and statistical methods. Actuarial science applies the mathematics of probability and statistics to define, analyze and solve the financial implications of uncertain future events. Traditional actuarial science largely revolves around the analysis of mortality and the production of life tables, and the application of compound interest.
BREAKING DOWN 'Actuarial Science '
Life insurance and pension plans are the two main applications of actuarial science. However, actuarial science is also applied in the study of financial organizations to analyze their liabilities and improve financial decision-making. Actuaries employ this specialty science to evaluate the financial, economic and other business applications of future events.
Many colleges and universities offer degrees in actuarial science, which consists of a solid foundation course in mathematics, statistics and economics and on all types of investments.