Editing Actuary (section)

===Development of the modern profession===
{{main|Actuarial science}}

In the 18th and 19th centuries, computational complexity was limited to manual calculations. The calculations required to compute fair insurance premiums can be burdensome. The actuaries of that time developed methods to construct easily used tables, using arithmetical short-cuts called [[Actuarial science#Technological advances|commutation function]]s, to facilitate timely, accurate, manual calculations of premiums.{{sfn|Slud|2006}} In the mid-19th century, professional bodies were founded to support and further both actuaries and actuarial science, and to protect the public interest by ensuring competency and ethical standards.{{sfn|Hickman|2004|p=4}} Since calculations were cumbersome, actuarial shortcuts were commonplace.

Non-life actuaries followed in the footsteps of their life compatriots in the early 20th century. In the United States, the 1920 revision to workers' compensation rates took over two months of around-the-clock work by day and night teams of actuaries.{{sfn|Michelbacher|1920|pp=224, 230}} In the 1930s and 1940s, rigorous mathematical foundations for [[stochastic process]]es were developed.{{sfn|Bühlmann|1997|p=168}} Actuaries began to forecast losses using models of random events instead of [[Deterministic system|deterministic methods]]. Computers further revolutionized the actuarial profession. From pencil-and-paper to punchcards to microcomputers, the modeling and forecasting ability of the actuary has grown vastly.{{sfn|MacGinnitie|1980|pp=50–51}}

Another modern development is the convergence of modern [[finance theory]] with actuarial science.{{sfn|Bühlmann|1997|pp=169–171}} In the early 20th century, some economists and actuaries were developing techniques that can be found in modern financial theory, but for various historical reasons, these developments did not achieve much recognition.{{sfn|Whelan|2002}}<ref>They were relevant to, and achieved recognition from, short-term derivatives traders and the like, but most actuaries ignored them because they were unsuitable for long-term actuarial calculations; they relied heavily on parameter values that were derived from obsolete economic history and were extremely uncertain – in effect, arbitrary – in the context of predicting the longer-term future.</ref> In the late 1980s and early 1990s, there was a distinct effort for actuaries to combine financial theory and stochastic methods into their established models.{{sfn|D'Arcy|1989}} In the 21st century, the profession, both in practice and in the educational syllabi of many actuarial organizations, combines tables, loss models, stochastic methods, and financial theory,{{sfn|Feldblum|2001|pp=8–9}} but is still not completely aligned with modern [[financial economics]].{{sfn|Bader|Gold|2003}}