What do actuarial tables help insurance companies determine?

Actuarial tables are essential tools for insurance companies as they provide a statistical basis for understanding the likelihood of various events, such as claims being made. By analyzing historical data, these tables help actuaries and underwriters calculate the probability of future claims based on different factors, such as age, health status, occupation, and more.

These tables are pivotal for setting premium rates because they allow insurers to assess the risk associated with insuring a particular individual or group. The calculations resulting from actuary tables inform how much the insurance company should charge to cover potential future claims while also remaining profitable. Thus, utilizing actuarial tables enables companies to balance their financial risk and manage their overall underwriting process effectively.