Actuarial science definition

Actuarial science is the application of mathematical and statistical methods, finance and economics to develop numeric models used most often to assess the possibility of risk.

Actuarial models are used most often in the insurance industry, but also in pension, welfare and other people-related fields.

The establishment of life insurance premiums, for example, are based on actuarial models that predict life-spans, such as a male who is 45 years old. Funding for pension plans is based on payouts predicted by the actuarial models. Actuarial science may also used for many other models that benefit from statistical prediction.