What is a primary function of actuaries in the insurance industry?

The primary function of actuaries in the insurance industry involves compiling statistical data and assessing risks. Actuaries use mathematical, statistical, and financial theories to analyze the potential future risk that can impact insurance companies. Their expertise helps insurers to evaluate the likelihood of events occurring and the financial implications of these events. This analysis is crucial for setting premium rates, determining reserves for future claims, and ensuring that the firm remains financially stable while meeting its obligations to policyholders. Their work is foundational in helping insurers understand risk in a quantifiable manner, which supports the overall health and sustainability of the insurance market.