Math is used in the insurance industry to set premiums, determine risks, and stay competitive.
Statistics are used to determine the likelihood of obtaining clients. Part of this process involves setting the premiums to sign clients, and still making a profit. Statistics are also used to determine the chances of a client switching companies. Numbers are crunched to create the best possible scenario to keep the client.
Math is also used to determine the demographics of the client. In the case of an emergency, how close are hospitals and fire departments? These factors affect the risk, which can affect the premium. It is also used to calculate how likely a client is to need to actually use the insurance. The higher the risk of use, the higher the premium will likely be.
