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| Photo: William and Mary News |
If there is a fire hydrant in front of your home, premiums on your homeowner’s insurance will be lower than the same home without a fire hydrant in its proximity.
But how close should a house be to a fire hydrant to be eligible for a reduced rate? And what reduction is proper? What evidence should be used? The people who figure out the factors that predict how much you should pay for insurance are called actuaries. And William & Mary produces them by the algorithm load.
Using probability, statistics and finance, actuaries drive many of the everyday outcomes of insurance. Drivers who have accidents usually see their car insurance go up dramatically. Smokers usually end up paying more for life insurance. The mathematical predictive power of actuarial science allows insurance companies to keep profitable, steering between the danger of risk on one side and the danger of uncompetitively high rates on the other. Larry Leemis says that all of this may seem intuitive, but the work of actuaries goes much deeper and broader.
Leemis, professor of mathematics at William & Mary, serves as the actuarial advisor in the Department of Mathematics. He has been preparing a record number of students for success in the actuarial science field. To become an actuary, a candidate must pass a series of exams offered by the Society of Actuaries (SOA).
According to Leemis, interest in the math major at William & Mary has more than doubled in the last two decades. He said the increase is due in part to more students wanting to go into fields such as actuarial science. Leemis said he expects interest in the actuarial field to remain strong in the future.
“As you get more people majoring in math and statistics because of the big data push right now, more of those people will be interested in going into actuarial science,” Leemis said.
“Big data” refers to the expanding capability of computational techniques to process amounts of data that were, until recently, unmanageable. William & Mary’s math department is addressing the training, research and educational aspects of big data through EXTREEMS-QED, a program funded by the National Science Foundation.
Big data has implications far beyond the actuarial sciences, and Leemis said the effects of the big data movement have become evident in the interests of William & Mary’s math majors.
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Additional resources
Actuarial science (From Wikipedia, the free encyclopedia)
Master of Science (MSc) in Actuarial Mathematics (University of Copenhagen, Denmark)
MSc in Actuarial Mathematics - Faculty of Science at University of Copenhagen
Source: William and Mary News
