Financial and Actuarial Risk Consulting.
The core expertise involved here is the ability to place a value on a risk. This is predominantly done by developing a mathematical distribution describing the potential costs associated with the risk and the related probabilities.
This distribution is then incorporated into a financial model, which assesses the financial impact on the chosen area of business or the entire enterprise. Several of these distributions can be incorporated to create a realistic model that will provide additional insight into the interaction between the various risks.
The obvious application for such a model will be the modelling of insurance risks. In the case of corporate entities this can be used to determine an optimal combination between self-insurance (retention) and conventional insurance. Both short-term insurance and life insurance programmes can be assessed in this way.