ACTUARY Meaning and
Definition
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An actuary refers to a professional individual who specializes in evaluating and managing potential risks, particularly in the field of insurance, finance, investment, and other related sectors. Actuaries use mathematical models and statistical analysis to analyze and predict the likelihood and financial impact of uncertain events in order to make informed decisions.
Primarily employed by insurance companies, pension funds, and consulting firms, actuaries play a vital role in determining the premiums an insured individual or entity should pay based on risk factors, such as age, health, or location. By estimating the financial consequences of these risks, actuaries assist in developing insurance policies that adequately cover potential losses while maintaining profitability for the provider.
Actuaries also contribute substantially to retirement planning and designing pension schemes. They assess various factors like life expectancy, investment performance, inflation rates, and personal circumstances to determine the amount of money an individual should save in order to have a secure post-retirement financial future.
Furthermore, actuaries provide valuable insights into investment decisions by calculating the risks and potential returns of different financial options. Their calculations aid financial institutions and asset managers in making competent investment choices that align with their clients' risk profiles and goals.
To become an actuary, one must possess a strong mathematical background, proficiency in statistical analysis, and an ability to interpret and communicate complex numerical information effectively. The actuarial profession often requires professional accreditation and ongoing continuing education to maintain relevant expertise.
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A notary; the managing director of an insurance office.
Etymological and pronouncing dictionary of the English language. By Stormonth, James, Phelp, P. H. Published 1874.
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Etymology of ACTUARY
The word "actuary" is derived from the Latin word "actuarius", which refers to a registrar, account-keeper, or clerk. The Latin term is thought to be derived from "actus", meaning "public business" or "act". Over time, the meaning of "actuarius" evolved to include someone who is skilled in keeping records, calculating, and analyzing financial data. In the 18th century, the term "actuary" started to specifically refer to professionals who worked with insurance statistics and calculations.
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