I work in IT (databasers and visualisation), but recently started a new job at a company that deals with actuaries, underwriting etc. Can someone explain what actuaries do in a way i can understand? Their are so many acronyms that get thrown about that when i ask about they literally just say what the letters mean and nothing further. Colleagues have tried, but tend to be quite short with their explanations and i don’t want to annoy them by asking more and more questions.
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Actuaries, at a very basic level, try to estimate risk.
They use statistical methods to estimate certain numbers that can then be used in making pricing or investment decisions. The most familiar one is life expectancy: an actuary looks at your statistics and basically estimates when you will die; this estimate is then used to set a price for your life insurance policy (higher if you’re more likely to die, lower if not).
Actuaries run different models with different assumptions to arrive at some prediction of what the future state of the world will be, and their companies use those estimates to buy insurance, sell insurance, hedge their positions, etc.
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