Actuaries are experts with advanced math skills that play a crucial role in helping businesses manage risks effectively.
These professionals utilise analytical tools to assess the probabilities of unknown future events and develop models to understand potential outcomes.
Actuaries are particularly prominent in the insurance industry, aiding clients in identifying risks and implementing measures to mitigate their impact.
Here’s a broad overview of why businesses need actuaries, what actuaries do, and how businesses can benefit in hiring them.
What do actuaries do?
Actuaries are financial professionals who specialise in risk assessment and probability analysis.
They use mathematical and statistical expertise to quantify risks and help businesses evaluate risk transfer options.
This involves developing models and projections to forecast potential outcomes and determine the need for risk mitigation strategies.
Actuarial consultants: Roles and competencies
Actuarial consultants assist businesses by conducting in-depth analyses to assess risk levels and propose suitable risk management approaches.
Actuaries assist in developing solutions that align with each client’s specific needs and goals.
Some of what actuaries do include:
- Financial proformas and projections
- Yearly rate-making
- Training sessions for Boards and audit committees
- Modelling, simulation, and forecasting for finances
- Price analysis and ORSA modelling
- Analysis and modelling for reinsurance
Benefits of hiring an actuary
Hiring an actuary offers two primary benefits to businesses:
1. Financial security
Actuaries provide data-driven insights that enable informed decision-making, ensuring long-term financial stability by considering risks in budgeting and investment decisions.
2. Improved control
Actuaries prepare for the worst by foreshadowing the risks that can occur.
With thorough risk assessments and contingency plans in place, businesses can effectively manage crises and adapt to changing circumstances, maintaining control over their operations.
How actuaries help specific business areas
Actuaries specialise in key areas such as ratemaking, reserving, and enterprise risk management. We explain this in further detail below.
Ratemaking
Actuaries use complex financial models to calculate fair and accurate rates for insurance products, considering large datasets and statistical methods to predict outcomes.
This is a difficult task, as it requires analysing large quantities of data to project certain costs and outcomes – allowing them to price their insurance products.
Reserving
Actuaries assist insurance companies in financial planning by analysing past claims and estimating reserves required to cover future liabilities effectively.
Enterprise Risk Management (ERM)
Actuaries develop sophisticated models to identify and address critical risks within organisations, guiding decision-making processes to implement cost-efficient risk management solutions.
Working with professional actuaries
Actuaries offer critical insight to businesses seeking to navigate uncertain environments, manage risks effectively and achieve long-term financial stability.
Collaborating with skilled actuaries can significantly enhance your company’s ability to manage risks and make informed strategic decisions.
Axxima have a team of professional actuaries that can provide tailored service to your businesses’ specific needs, whether related to property and casualty insurance, ratemaking, reserving or enterprise risk management.
If you’re looking for actuaries to assist your business, get in touch with Axxima’s team today to learn how they can assist.