Actuarial Intern Interview Questions and Answers

Reserves are funds set aside by an insurance company to cover future claims and obligations.

• Reserves are calculated based on actuarial projections of future claims and expenses.

• They serve as a financial cushion to ensure the company can meet its obligations to policyholders.

• Reserves are required by regulators to ensure the financial stability of insurance companies.

• Examples of reserves include loss reserves for unpaid claims and premium reserves for unearned premiums.

Insurance products can be ranked based on premiums from highest to lowest

• Life insurance typically has higher premiums due to longer coverage periods and potential payouts

• Health insurance premiums can vary based on age, health status, and coverage options

• Auto insurance premiums are influenced by factors like driving record, age, and type of vehicle

• Homeowners insurance premiums depend on factors like location, property value, and coverage limits

Different statistical distributions are used to model different types of data in actuarial science.

• Common distributions include normal, binomial, Poisson, exponential, and gamma distributions.

• Each distribution has its own set of parameters that describe its shape, spread, and location.

• Choosing the right distribution is crucial for accurately modeling and analyzing data in actuarial work.

Call/put options are financial contracts that give the buyer the right, but not the obligation, to buy/sell an underlying asset at a predetermined price within a specified time period.

• Call option: the right to buy an underlying asset at a predetermined price within a specified time period

• Put option: the right to sell an underlying asset at a predetermined price within a specified time period

• The buyer pays a premium to the seller for the option contract

• Options are commonly use...read more