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Simple English definitions for legal terms
actuary
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A quick definition of actuary:
Actuary: An actuary is a person who uses math to figure out how much money insurance companies should charge people for insurance. They look at things that might happen in the future and use that information to decide how much money people should pay now to be protected later. Actuaries also help companies figure out how much money they need to save to pay for things like retirement plans for their employees.
A more thorough explanation:
Definition: An actuary is a statistician who uses empirical data to determine the present effects of future contingent events. They are responsible for calculating insurance and pension rates based on statistical analysis.
Example 1: An actuary may use data on the life expectancy of a certain demographic to determine the cost of life insurance for individuals in that group.
Example 2: An actuary may analyze data on car accidents to determine the likelihood of a driver getting into an accident and use that information to calculate car insurance rates.
Both examples illustrate how an actuary uses statistical analysis to determine the likelihood of future events and calculate rates based on that information.