# What are Actuarial Mathematics ?

Actuarial Mathematics

The field of knowledge that includes a set of mathematical methods of mathematical modeling and computer technologies for direct use in the financial and economic institutions.

Major in actuarial mathematics in accordance with OKRB 011-2001 refers to the gender profile of training specialists with higher education, belongs to the Group of professions “Mathematical Sciences” and has the code 1-31 03 05.

A graduate degree in Actuarial Mathematics provides skills in mathematics-financier ”

The objects of professional activity are mathematical and financial models, processes and systems in various areas of research, production and business operations.

• Participation in the mathematical modelling of processes and systems in financial and economic areas
• The development or use of methods of analysis or solution of mathematical models and problems
• The development and use of computer technology.

In the following specializations:

• Mathematics of insurance
• Mathematics of financial markets

Actuaries are multilateral, analysts have a good theoretical training and practical skills in such sciences as mathematics, statistics, economics, demography, probability theory and finance. These analytical and practical knowledge are applied to financial modelling random social factors to prevent and address economic and social challenges of the collective financial institutions. Based on the collected statistics, using mathematical models of computer programmed for the activists are building a financial estimates for the close and distant time horizon, widely applying the techniques of risk management. In other words, the actuaries provide analytical support to top-managers and assess the impact of potential solutions. In case of failure of the project is the actuaries provide practical solution out of this situation with the least losses.

The word “activist” comes from the Latin word “actuarius.” The man, who was the post, led the Senate meeting minutes in ancient Rome. However, the word lost its meaning and secretarial since late 18 century is inextricably linked with the insurance business. The origin of the profession of “activist” in the modern sense is associated with the appearance of the first life insurance organizations, when there was a need for calculating premiums on real scientific basis. First, in modern terms, the actuarial firm originated in Great Britain in 1762, in subsequent years, the needs of the market have identified a continuous increase in the number of such firms. The logical conclusion of this process was the awareness of the need to create a professional organization of Actuaries. So there was the Institute of Actuaries in London (1848 g.) and the Faculty of Actuaries in Edinburgh (1856 g.). Their main tasks were formulated as assistance in the development of the theory and practice of actuarial science, to improve information for Actuaries, including the statistics for qualified transactions. At the same time, and understanding the importance of State acts on insurance, pension provision, governing and regulating this sphere of social relations.

The profession of actuary until more influential abroad than in our country. For example, in the United States it is very prestigious and remember being on top of the professions. But domestic institutions increase their interest in such specialists. Our activists are in such structures as: insurance companies, banks and pension funds.

The law “on insurance activity”, which entered into force on January 1, 2001, which introduced new accounting standards and financial reporting of insurance organizations, principles and standards of the insurance market in line with international standards was established by the profession of actuary in Kazakhstan. Under the new law, every insurance (reinsurance) the organization is required to have insurance reserves, loss ratio on all types of insurance, calculated by actuary. In accordance with the law, as actuary to act natural person licensed to conduct actuarial activity, issued by the National Bank of Kazakhstan.

The task was the implementation of the activities of the actuarial economic-mathematical calculations of obligations under contracts of insurance and reinsurance in order to ensure the necessary level of financial stability and solvency of insurance (reinsurance) organizations.

Activists respond to typical for managers of insurance companies issues. For example, how should be reduced premium, which is paid for getting rid of the risk in the event of a franchise-damage insurance company does not cover? What is the optimal level of risk, the insurer sent a reinsurance company, taking into account the cost of reinsurance in case of major risks? For these and many other issues activists know the answers. Actuaries play a significant role in determining the tariff policy of an insurance company or private pension fund, shall assess the cost of securities portfolios of treaty obligations. Actuaries can help financial managers of enterprise to evaluate different staffing costs, in addition to salary. Actuarial forecasts allow you to prevent liquidity crises, in other words, the lack of available funds to make payments. The actuaries of basic financial training easily suited to calculation of expected profitability, efficiency and payback any financial projects, taking into account the basic macroeconomic indicators, such as inflation. Actuarial work is interesting in that it is located at the junction of personnel management, accounting and financial calculations, the actuary must work in close contact with the specialists of these related professions.

Now Actuaries are those who have passed the University or other training, passed the exams and formally belongs to a national professional organization of Actuaries (for example, the Institute of Actuaries in the UK; the society of Actuaries in the United States and Canada, the Association of Actuaries in Finland).

In 1895, the national professional society of Belgium, France, Germany, Britain and the United States organized an International Association of Actuaries (International Actuarial Association-IAA), based in Brussels, which every four years holds its Congresses (regular, 28-th International Congress of Actuaries held in May-June 2006 in Paris). One of the traditions of the International Congress of Actuaries is to enable all national societies to inform the actuarial community, about the functioning, the pressing problems of actuarial science and practice, to provide interesting statistics. Congresses include a large scientific programme, which attracted representatives of pure science and its applications.

That would become a full member of IAA requires that National Association of Actuaries meets the following conditions:

1. Institutionalization as a professional society within the country;
2. The introduction of a code of conduct that complies with the requirements of European actuarial Consulting Group (Organization of European Association of Actuaries);

3. An adequate mechanism for dealing with complaints and compliance with the code of conduct;

4. The training of Actuaries in accordance with a basic list of the IAA and the requirements of persons who, since 2005, will join the IAA as full members;

5. Payment of annual membership dues (currently \$ 6.5 per Member). On the Web site of the IAA www.actuaries.org has a list of organizations that are ordinary members of the IAA.