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. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  2. How are double exponential moving averages applied in technical analysis?

    Double exponential moving averages (DEMAS) are commonly used in technical analysis like any other moving average indicator ... Read Full Answer >>
  3. How do you know where on the oscillator you should make a purchase or sale?

    Common oscillator readings to consider making a buy or sale are below 20 or above 80, respectively. More aggressive investors ... Read Full Answer >>
  4. What are the alert zones in a Fibonacci retracement?

    The most commonly used Fibonacci retracement alert levels are at 38.2% and 61.8%. A 50% retracement level is also commonly ... Read Full Answer >>
  5. How was the Fibonacci retracement developed for use in finance?

    The use of Fibonacci retracements in stock trading was popularized by noted technical analysts W.D. Gann and R.N. Elliott. ... Read Full Answer >>
  6. How was the stochastic oscillator developed?

    The history of the stochastic oscillator is filled with its own controversies and inconsistencies. Most financial resources ... 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. Fundamental Analysis

    Explaining Price Targets

    A price target is what an investment analyst projects a security’s future price to be.
  7. Fundamental Analysis

    Present Value Interest Factor of Annuity (PVIFA)

    PVIFA can be used to calculate the present value of a series of annuities by considering cash flows and depreciation.
  8. Retirement

    How to Convert a Roth IRA to a Traditional IRA

    If the technicalities of converting a Roth IRA to a traditional IRA seem dauntingly complex, here are a few simple tips to guide you through the process.
  9. Retirement

    5 Reasons to Convert a Roth To a Traditional IRA

    Here's a quintet of cases when the traditional IRA trumps the Roth version.
  10. Personal Finance

    Get Your House In Order By Choosing a Financial Advisor

    As the old saying goes, people don't plan to fail, they just fail to plan.

You May Also Like

Hot Definitions
  1. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  2. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  3. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  4. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  5. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  6. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!