What is one key function of actuaries?

One key function of actuaries is rate-making, or pricing, which entails determining the rates that insurance companies should charge for coverage based on various statistical analyses and financial modeling. Actuaries use mathematical skills, statistical knowledge, and understanding of risk to assess potential liabilities and establish premium amounts that adequately reflect the risk while ensuring the company remains profitable.

This involves analyzing historical data, predicting future events, and considering factors such as demographics, environmental influences, and economic trends. Accurate rate-making is crucial for the sustainability of an insurance company, as it impacts profitability and competitiveness in the market.

Other choices involve roles and activities critical to insurance operations, but they do not align with the specific expertise and primary responsibilities of actuaries. Conducting customer satisfaction surveys relates more to market research, developing advertising campaigns focuses on marketing strategies, and managing the underwriting process pertains to evaluating risks and determining coverage eligibility, which typically falls under the purview of underwriters rather than actuaries.