Actuarial Analysis can be defined as the examination, measurement, estimation or determination of the degree of risk involved in a certain project by a highly educated, professional and experienced statistician. The major objective of the Actuarial analysis is to measure the risk associated with a certain project or a certain activity so that the financial uncertainty can be removed regarding that project. This kind of financial uncertainty can affect the profitability and the rate of success of the projects so it is advisable to calculate this uncertainty and remove it before launching the project in a final mode. The method of actuarial analysis is used by almost all big financial institutions such as insurance companies, banks, government institutions, corporations and business entities to ensure the designing and implementation of such insurance policies that have minimal risk in the future.
Actuarial analysis can also be used to design such plans, retirement plans, pension plan and insurance policies for the individual that have minimize risk associated with them and they can give a fruitful return in the future. Actuarial analysis is an integral and important part of the insurance company’s process of analysis to make sure how an insurance policy is going to execute in the future and what will be the associated risk with that policy. This analysis also helps in defining the way to overcome a claim when it is filed against the occurrence of a certain event. With the help of actuarial analysis the insurance company may decide the reasonable amount and accuracy of the insurance claim and how much premium must be charged and paid to the client to remain profitable.