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 Articles
  1. Insure Your Future With A Career As ...
    Home & Auto

    Insure Your Future With A Career As ...

  2. Beta: Gauging Price Fluctuations
    Investing Basics

    Beta: Gauging Price Fluctuations

  3. Understanding Volatility Measurements ...
    Mutual Funds & ETFs

    Understanding Volatility Measurements ...

  4. Operational Risk: A Must-Know For Investors
    Active Trading Fundamentals

    Operational Risk: A Must-Know For Investors

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center