What role does an actuary play in an insurance company?

The role of an actuary in an insurance company is pivotal as they are primarily responsible for analyzing financial risks using mathematics, statistics, and financial theory. Their expertise enables them to track loss statistics and calculate premiums, which are essential for ensuring that the insurance company remains financially viable. By evaluating historical data and trends concerning risks and claims, actuaries help establish the likelihood of future claims and determine the appropriate premiums to charge policyholders. This process ensures that the insurance company can cover potential losses while maintaining profitability.

While other roles, such as managing customer service or overseeing legal claims, are crucial to an insurance company’s operations, they do not align with the primary statistical and financial analysis that defines an actuary's functions. Similarly, underwriting new insurance policies is an important task, but it primarily involves assessing risk and setting terms for policies rather than calculating premiums based on statistical analysis.