Why Are Actuaries So Important For An Actuary?

There are several important things for an actuary to consider when setting the premium rates. They make projections of the future costs and they base these projections on historical results, probabilistic models, and their own judgments. Actuaries must consider different risk pools and make the premiums fair to all. For instance, they can consider statistically how likely a driver is to get into a car accident with several speeding tickets versus a driver with none. In order to use the predictability of the law of large numbers an actuary must consider pools large enough, however, they must also make sure those in the pool are similar to one another.
There are several expense categories that are built into an insurance premium. The largest