Year: 2015 | Month: July | Volume: 2 | Issue: 7 | Pages: 476-480
The Role of Statistics in Insurance Business
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The business of insurance is sustained by a complex system of risk analysis and this analysis involves anticipating the likelihood of a particular loss and charging enough in premiums to guarantee that insured losses can be paid and this is afforded by statistics to be used to determine what risk an insured poses to an insurance company, what percentage of policies is likely to pay out, and how much money a company can expect to pay out in claims. In this paper we highlighted the role of statistics in insurance business for instance to introduce and develop new products, statistics play a role in evaluating sample and collateral information. Linear regression models are essential tools in finding risk factors for premiums calculations. Time series methods are used in various ways to predict trends, and simulation methods are crucial to understanding the many models considered for anything from new products to revisions in rating schemes. Frankly speaking, many insurance business activities can be accomplished with statistics including deciding a new location, marketing the product, and estimating what the profit will be on a new product and so forth that is why we underline the irreplaceable role of statistics in all stages of insurance business.
Keywords: Insurance, Statistics and Role of Insurance Statistics.