Actuarial Research Center
There has been a growing demand, in Israel in particular and around the world in general, for professional personnel in the field of actuarial science, whose function is to evaluate financial risks in conditions of uncertainty. Actuarial science, which integrates statistical, probabilistic, mathematical, and economic methodologies, is considered vital for companies and organizations that engage in various aspects of insurance (whether life, health, or elementary), pension funds, and investments. In each of these areas, the actuary has a key task in determining policies and making decisions that prepare individuals, companies, or organizations to face financial risks, some of which might prove fateful.
In the course of training, actuaries are exposed to basic methodologies in the field, to enable them to contend with actuarial problems that have been previously defined and solved. However, in the changing reality of everyday life, new problems crop up, the solution of which requires research and development of novel methodologies. The Actuarial Research Center was founded to lead the way toward innovative approaches and solutions.
To date, the Israeli industry’s approach to financial risk has consisted of adapting foreign solutions to better reflect Israeli reality and its needs. Thus, the mortality tables (which form the basis of actuarial calculations for most types of life insurance) in use in Israel today come from England and are subject to an adjustment. However, this adjustment (the addition of a war risk evaluated at ½ of a pro-mil) has no scientific justification or basis; at best, it represents the intuition of insurance company actuaries or, alternatively, it is a manifestation of the interests of such companies, a practice that has drawn ample criticism. In the west, actuarial centers work to gather and analyze mortality data to provide the mortality tables necessary for performing precise calculations. In Israel, this step has yet to be taken. The Actuarial Research Center aims to close this gap, as well as address a variety of additional topics.