MANAGEMENT

Detailed explanation-1: -The actuary will apply statistical methods, risk theory and external trends such as inflation in order to calculate premiums within groupings of clients sharing predictive attributes of risk.

Detailed explanation-2: -An insurance company can calculate their expected loss by comparing their projected number of claims and the estimated value of those claims to the premiums they anticipate earning over the same period of time. The result of the comparison is the insurer’s expected loss ratio.

Detailed explanation-3: -The insurance underwriter uses statistical models to estimate the number of losses it expects to incur from claims made against its policies. These models factor in the frequency and severity of claims settled in the past.

Detailed explanation-4: -The loss ratio is a mathematical calculation that takes the total claims that have been reported to the carrier, plus the carrier’s costs to administer the claim handling, divided by the total premiums earned (This refers to a portion of policy premium that has been used up during the term of the policy).