Actuarial modeling

Actuarial modeling is a process used to evaluate financial risks, primarily in insurance and finance. It involves creating mathematical representations of real-world scenarios—such as predicting future claim amounts or life expectancy—by analyzing historical data and applying statistical methods. These models help actuaries estimate potential costs and set appropriate premiums or reserves, ensuring organizations remain financially stable. In essence, actuarial modeling combines data analysis, probability, and finance to make informed predictions about uncertain future events, aiding decision-making and risk management.