Actuarial science is a field wherein professionals apply math, statistics and computer literacy skills in assessing the risks of a financial decision. While insurance is a pervasive industry that relies on actuarial science, financial services firms and large corporations also hire professionals to advise on investment decisions.
The premise of actuarial science is that, by using facts, data and statistical analysis to assess the risk-reward relationship of a decision, a company is less likely to make a bad investment. Such statistical analysis is vital to the success of insurance companies that rely on precise analytical models to make coverage decisions and to assess premiums to customers.
In financial services companies, actuaries study historical data and charts and make projections on the risks and rewards of investment alternatives. A mutual fund buyer might rely on an actuarial scientist when selecting certain equities and investment assets, for instance. Similarly, large organizations use actuarial science to evaluate risks and rewards of acquisitions, expansions, diversification and financial investments.
Actuaries typically need a bachelor's degree in actuarial science, math, statistics or business. Some earn master's degrees. Excellent math, statistics, computer, analytical and communication skills are necessary. After preparing graphs and charts depicting risks and rewards, the actuary normally presents a proposal or recommendation to a supervisor, leadership group or client.