Actuary
Definition
An actuary is a professional who uses mathematics, statistics, and financial theory to analyze risk and uncertainty. In the insurance industry, actuaries calculate the likelihood of future events—such as accidents, illnesses, or deaths—and help companies set premiums, establish reserves, and assess financial exposure. Actuaries are trained specialists, often holding credentials from organizations like the Society of Actuaries or the Casualty Actuarial Society.
How It’s Used in Personal Injury Cases
While you may never interact directly with an actuary during your claim, their work influences nearly every aspect of how insurance companies operate. Actuaries determine how much insurers charge for policies, how much they set aside for claims, and what settlement ranges adjusters are authorized to offer. In complex personal injury cases—especially those involving catastrophic injuries or wrongful death—actuaries may be hired as expert witnesses to calculate the present value of future losses, such as lifetime medical expenses or lost earning capacity.
Practical Example
A construction worker suffers a spinal cord injury that leaves him paralyzed from the waist down. He will require ongoing medical care, home modifications, and assistance with daily living for the rest of his life. His attorney hires an actuary to project these future costs, accounting for inflation, life expectancy, and medical cost trends. The actuary’s analysis shows that lifetime care will cost approximately $4.2 million. This figure becomes a critical component of the demand presented to the insurance company.
Why It Matters to Your Case
In cases involving long-term or permanent injuries, an actuary’s calculations can substantially increase the documented value of your claim. Jurors and insurance adjusters respond to concrete numbers backed by professional analysis. Without actuarial evidence, you risk underestimating your future needs and settling for far less than you deserve. If your injuries will affect you for years or decades to come, working with financial experts is essential to capturing the full scope of your damages.
Key Takeaway
Actuaries are risk and financial experts whose calculations shape insurance operations and can quantify future damages in serious injury cases. Their analysis ensures you account for long-term costs when seeking compensation.