The Actuarial Process is the fundamental framework upon which the Modeling the Future Challenge is built. It extends your mathematics and science knowledge into the world of data analysis and risk management. To be great at navigating the choppy waters of the future, you must be great at managing risks. No matter what your interests or career aspirations, you’ll want to understand how the Actuarial Process can be used anytime you’re in a situation where you need to make a decision involving uncertain outcomes. Following the Actuarial Process will help you become successful at identifying, characterizing, and managing risks in all aspects of your life, no matter your interests or career. The Actuarial Process Guide is the primary resource for the Modeling the Future Challenge.
The Actuarial Process is a five-step framework, similar to the scientific method, that lays out the core structure of how to successfully identify, analyze, and manage risks.
The Five Steps of the Actuarial Process
1: Project Definition
Conduct background research and identify a topic for your project by writing a Problem Statement.
2: Data Identification & Analysis
Research the available historical data for your project topic and check that you have enough to develop a strong model and analyze risks.
3: Mathematical Modeling
Develop mathematical, computational or analytical models that help you define the most likely outcomes for your project topic.
4: Risk Analysis
Compare likely outcomes from your actuarial model and use them to characterize and define the potential risks.
Use analysis to identify risk mitigation strategies and make recommendations to affected stakeholders on how to best manage risks.