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Actuary Meaning: Definition, Examples, and Translations

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actuary

[หˆaktสƒuหษ™ri ]

Definition

Context #1 | Noun

insurance profession

An actuary is a professional who analyzes the financial consequences of risk. They use mathematics, statistics, and financial theory to study uncertain future events, particularly those that are of concern to insurance and pension programs. Actuaries assess the likelihood of events such as death, sickness, injury, disability, and property loss, and help formulate policies that minimize the cost of those risks. Their work is essential in determining premium rates and ensuring the financial stability of insurance companies.

Synonyms

insurance analyst, risk analyst, statistician.

Examples of usage

  • An actuary calculated the insurance premiums based on risk factors.
  • Many actuaries work for government agencies to analyze health care costs.
  • She decided to become an actuary after realizing her passion for statistics.

Translations

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Interesting Facts

History

  • The profession began growing in the 1700s as life insurance became more common, requiring data analysis.
  • The first actuarial society was founded in 1852 in London, paving the way for formal training in the field.

Science

  • Actuaries often apply the principles of probability and statistics to predict future events and risks.
  • They use complex mathematical models to determine how likely events, like accidents or illnesses, are to happen.

Pop Culture

  • In films and TV shows, actuaries are sometimes portrayed as the 'numbers people' behind large insurance agencies.
  • The character of an actuary often appears in discussions about finance, showing their crucial role in modern business.

Psychology

  • Understanding risk perception is vital for actuaries as it influences how policies are priced and sold.
  • Psychological factors, such as how people respond to risk, can affect the assumptions that actuaries make in their work.

Origin of 'actuary'

Main points about word origin

  • The word 'actuary' comes from the Latin word 'actuarius', meaning 'accountant' or 'one who keeps records'.
  • In the 19th century, the term evolved to denote professionals who assessed financial risks, especially in insurance.

The term 'actuary' is derived from the Latin word 'actuarius', meaning 'register' or 'accountant', which indicates the role of the profession in record-keeping and calculating risks associated with insurance. The use of actuaries in the financial sector dates back to the 17th century, as a response to the increasing complexity of businesses and insurance companies starting to emerge during that period. The profession grew significantly in the 18th and 19th centuries, particularly in the UK and the United States, alongside the development of life insurance and pension plans. As the role of actuaries evolved, it became clear that advanced mathematical and statistical training was necessary, leading to the establishment of professional organizations and examinations to maintain standards in the field. Today, actuaries are integral to various sectors, including health insurance, property insurance, and even finance, using their expertise to manage risks and make decisions based on uncertain future events.

Word Frequency Rank

Positioned at #20,259, this word is part of extensive vocabulary. It's relatively rare in general usage but may be important in specific fields or formal writing.