But they do not stop there. They answer with a second question:
| Actuarial Science Contribution | Risk Management Application | | --- | --- | | Probability distributions of claim amounts | Setting insurance premium rates and deductibles | | Time series forecasts of interest rates | Asset-liability matching for pension funds | | Mortality and morbidity tables | Pricing life and health insurance, setting reserves | | Catastrophe models (hurricanes, earthquakes) | Purchasing reinsurance, managing geographic concentration risk | | Stochastic simulation of balance sheets | Determining economic capital and regulatory solvency | actuarial science and risk management
To study actuarial science is to learn the mathematics of the future. To practice risk management is to shape it. And in an uncertain age, there is no more valuable skill than that. “Risk comes from not knowing what you’re doing.” — Warren Buffett. Actuarial science and risk management are how you come to know. But they do not stop there