PINGHER, JOAN, ANIS, AMAN

3K6 Group 4

Actuarial
Science
Real-Life Applications of
Probability Distribution
Content
Introduction of Introduction of
01 Probability Distribution 02 Actuarial Science

Real-life
02 applications 03 Conclusion

04 Individual Reflections
 About
Probability Distribution
The mathematical function that gives the probabilities
of occurrence of different possible outcomes for an
experiment
A mathematical description of a random
phenomenon in terms of its sample space and the
probabilities of events
Actuarial
Science
About calculating money related risks through
probability, statistics and business knowledge.

Main task for actuaries:

Evaluating risks and maintaining the economic
stability of insurance or financial organisations
Applications

15
Pension industry
Application 1
In the pension industry, actuarial science helps
assess different approaches to designing, funding,
managing, and maintaining pension plans.

Actuaries often use probability distributions to

predict uncertainties and plan for future decisions.
They use probability distribution to model
economic factors like inflation rates, GDP growth,
and market returns.

This modelling assists in evaluating various

economic scenarios that can impact the
performance and financial status of pension plans.
 Insurance
An actuary from an insurance industry
can use probability distribution to
analyse events in the past and their risks.

Using probability distribution, they can model the

likelihood for different events such as natural
disasters or man made accidents using similar
events that have happened in the past. With this
information, the actuary can determine the
appropriate premiums for insurance policies.
Pricing
Actuary
An actuary that works with financial analysts
and accountants to set prices for security
offerings is called a pricing actuary.

They use their knowledge of statistics and finance to assess the risk of an
investment and determine how much it should cost.

They also work with other professionals to develop pricing models and ensure
that prices are fair and competitive.

Pricing actuaries are in high demand in the financial industry, as they play a vital
role in ensuring that investors are properly compensated for the risks they take.
Conclusion Probability distribution is a
tool for actuaries.
They use it to plan for
pensions, figure out
insurance costs based on
past events, and set fair
prices for investments.
Because risks are
everywhere, actuaries are
really important in keeping
our finances steady.
 Individual
reflection
Ping Her Joan You
What I learned : What I learned :
How probability distribution is How much you could make
used in pension planning with maths knowledge

How probability helps By using probability

actuaries predict financial distribution, we can predict
risks, make smart decisions, the probability of outcomes
and communicate complex and risks.
ideas clearly
 Individual
reflection
Anis Liyana Aman Darwisy
What I learned : What I learned :
I struggled with trying to find Actuarial science and
applications and pushing me actuaries themselves contain
to do more research mostly financial risks, which
are the inherent part of any
How actuaries are able to economic activity.
predict different kinds of risks
such as natural disasters, car Actuaries are the backbone
accidents, financial problems for the stability and
and more soundness of companies and
financial institutions alike.
Thank You

15