Life Insurance

A large number of CIA members (roughly 40 percent) are employed by life insurance companies, or in roles that serve the life insurance industry, such as consulting. As a practice area, the term “life insurance” actually encompasses a much wider scope, which includes annuities, retirement savings products, group life and health insurance, disability insurance, and living benefits products—all of which are issued by life insurance companies. Actuaries employed by reinsurance companies would also be included in this practice area.

Actuaries can fill a number of diverse roles within the operations of a life insurance company. These include, but are not limited to: 

• Pricing and product design—a key actuarial role is to determine the profitability of all products issued by the insurance company. This includes determination of premium rates, development of actuarial models to measure profitability, conducting experience reviews, setting key pricing assumptions such as mortality, and working closely with the product development department. Pricing actuaries will also interact with other areas of the company, which include underwriting, contract development, policy administration, and distribution.
• Valuation and financial reporting—actuaries are responsible for determining the liabilities associated with any policies issued by the insurer, also known as reserves. This function requires the actuary to set appropriate assumptions for valuation, develop and maintain valuation models, and ensure appropriate controls are in place. Because insurance contract liabilities are a prominent item in the company’s financial statements, actuaries are heavily involved in the financial reporting function. They can also play roles in surplus management, required capital reporting, risk management, and asset-liability management.