Actuarial Analysis

AAA

DEFINITION of 'Actuarial Analysis'

The examination of risk by a highly educated and certified professional statistician. Actuarial analysis uses statistical models to manage financial uncertainty by making educated predictions about future events. Insurance companies, banks, government agencies and corporations use actuarial analysis to design optimal insurance policies, retirement plans and pension plans and to analyze investment risks.

INVESTOPEDIA EXPLAINS 'Actuarial Analysis'

For example, actuarial analysis is an essential task performed by insurance companies to analyze data and estimate the probability of an insurance claim being filed for a given event. This work allows insurance companies to predict with a reasonable degree of accuracy the amount of claims they will pay out, which helps them determine what premiums they must charge to remain profitable.

RELATED TERMS
  1. American Academy Of Actuaries - ...

    A group that provides analysis to aid in public policy creation, ...
  2. Actuarial Rate

    Actuarial rate is an estimate of the expected value of future ...
  3. Actuarial Equity

    The calculation of an insurance premium based on crucial factors ...
  4. Canadian Institute Of Actuaries ...

    The Canadian Institute of Actuaries, or CIA, is an organization ...
  5. Associate In Loss Control Management ...

    A professional designation earned after the successful completion ...
  6. Aggregate Mortality Table

    Data on the death rate of everyone who has purchased life insurance, ...
RELATED FAQS
  1. How much of the asset management industry has moved from traditional managers to ...

    While the exact numbers are difficult to calculate due to variations in measurement and the overall growth of the asset management ... Read Full Answer >>
  2. Places where I can open an IRA Account?

    An individual retirement account can be opened through a range of major financial institutions, including brokerage firms ... Read Full Answer >>
  3. What is the difference between a drawdown in banking and a drawdown in trading?

    The term "drawdown" appears in both the banking world and in the arena of trading, but it has completely different meanings ... Read Full Answer >>
  4. How can the exponential moving average be used in swing trading?

    The exponential moving average (EMA) is a variation of the simple moving average that places more emphasis on the latest ... Read Full Answer >>
  5. Why is the Triple Exponential Moving Average (TEMA) important for traders and analysts?

    The triple exponential moving average (TEMA) is important for traders and analysts because it is useful as a trend indicator. ... Read Full Answer >>
  6. What is a drawdown arrangement?

    A drawdown arrangement is most frequently associated with pension funds and how retirement income is received. The principle ... Read Full Answer >>
Related Articles
  1. Home & Auto

    Insure Your Future With A Career As An Actuary

    If you've got excellent math skills, they can add up to a lucrative career as an actuary.
  2. Investing Basics

    Beta: Gauging Price Fluctuations

    Learn how to properly use this measure that can help you meet your criteria for risk.
  3. Mutual Funds & ETFs

    Understanding Volatility Measurements

    How do you choose a fund with an optimal risk-reward combination? We teach you about standard deviation, beta and more!
  4. Active Trading Fundamentals

    Operational Risk: A Must-Know For Investors

    This type of risk is often overlooked, but it can mean the downfall of a company - and its investors.
  5. Budgeting

    Extended Warranties: Should You Take The Bait?

    Avoid shelling out for these policies and you could save hundreds of dollars.
  6. Charts & Patterns

    Why These May Be the Top 4 Growth Stocks of 2015

    These four stocks have high upside potential in 2015.
  7. Chart Advisor

    Interested in Growth Stocks? See These 4 ETFs

    Given the rise in popularity of growth ETFs, there are several interesting growth stock choices for investors.
  8. Retirement

    Some Tax Considerations For Your Retirement Income

    Even if you don’t plan to retire, it’s still a good idea to think ahead about where to live, your income and how it all interacts with Social Security.
  9. Chart Advisor

    Watch Out For Falling Copper Prices

    Commodity traders have been turning their attention toward copper prices over the past several weeks.
  10. Chart Advisor

    Watch for Bullish MACD Crossovers in These Stocks

    These stocks are trending higher but recently experienced a pullback. Watch for a bullish MACD crossover to indicate upward momentum is continuing.

You May Also Like

Hot Definitions
  1. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  2. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  3. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  4. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  5. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  6. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
Trading Center