How is 'actuarial science' defined?

Actuarial science is defined as the discipline that applies mathematical and statistical methods to assess risk in insurance and finance. This field combines knowledge from diverse areas including mathematics, statistics, and financial theory to evaluate the likelihood of events and their potential financial impacts. Actuaries use these skills to calculate insurance premiums, reserve funds, and to ensure the stability and financial soundness of insurance companies.

While other options mention important aspects related to insurance, they focus on narrower areas. For instance, the study of consumer behavior pertains to marketing and sales strategies rather than the broader risk assessment methodologies that actuaries employ. Similarly, calculating insurance premiums based on past events is a component of actuarial science but does not encompass the entire scope and techniques of the discipline. Techniques for detecting fraudulent claims, while important in insurance, are primarily concerned with claims processing and fraud prevention rather than the mathematical risk assessment foundational to actuarial science. Thus, the definition encapsulated in the correct answer reflects the comprehensive role of actuaries in understanding and mitigating risk within the insurance sector.