Actuarial Analysis

Making sure a company can pay its obligations. Actuaries try to predict the future with statistical models to see if companies like insurers have enough money to pay out claims. It’s really about geeking out on some math, but the analysis is used by any company that might have to fulfill pre-promised payouts, including retirement plans.

Let’s say you have the Ocean Flood Insurers and they need to make sure they have enough premiums to make any payouts for hurricane damage. They’d hire an actuary to come in and do an actuarial analysis to model catastrophes like floods and hurricanes using statistics, and project the cost of the damage, and then compare that to the amount they have in premiums.