Jobs for Statisticians in the Insurance Sector

Statistician working
Statistician working

The role of a statistician, particularly in the applied statistics field, can take you into a multitude of fields and disciplines. Opportunities abound for those looking for a career in statistics. And opportunities are predicted to grow significantly over the next 10 years (30% from 2018 to 2028 per the Bureau of Labor Statistics). Michigan Technological University recently published a blog delineating some of the fields where statistics are front and center. Among the careers mentioned: jobs for statisticians in the insurance sector.

Insurance Statistician Jobs – What is an Actuary?

The primary role of a statistician in the insurance industry is as an actuary. Actuarial statisticians are primarily responsible for the analysis of future risk probabilities and the determination of policy premiums and rates. The type of studies performed are varied and typically include examining claims regarding:

  • Property damage
  • Accidents
  • Product failure

However, the work can be even more extensive. Biz Fluent reports that the actuarial profession also branches into the setting of rates by way of:

  • Loss distributions (e.g., modeling claim behavior across categories such as age)
  • Linear modeling (looking at the impact of such factors as age, gender, or location on the size of claims)
  • Time series modeling (e.g., examining claims performance over time)

What Does an Insurance Actuary Do – A Day in the Life

The Society of Actuaries interviewed actuaries about their typical days. The general response was that there is no "typical day." The work varies – ideal for someone who wishes to avoid a routine or dull job. One individual noted that her daily work included:

  • Research (such as determining applicable accounting rules for a client)
  • Providing Guidance/Advice (e.g., assisting a client through an audit)
  • Professional Development (attending workshops on model development, etc.)
  • Committee work/professional volunteering

Another said that her team was primarily involved in rate analysis, which consists of a balance of technical (statistical) ability and business sense. This balance ensures that the technical findings are used to make the best business decisions. Another actuary stated that another important aspect of the role is the ability to communicate effectively, such as when responding to insurance department inquiries.

Actuary Education and Salary

The role of insurance actuary is substantial in math and statistics. Anyone interested would do well to enroll in a program that emphasizes probability and stats (which is what makes a degree in applied statistics ideal). Actuaries are also expected to pass rigorous certification exams to ensure their capability to perform the job well. However, the hard work pays off well in terms of salary. The BLS gives the median salary of an actuary as $102,880 per year and predicts 20% growth in jobs in the next ten years. Glass Door reports a salary range of $81,000 to $136,000 (based on 1,565 salaries).

Are there other Insurance Statistics Jobs?

While the role of the actuary is the primary analyst role in the insurance sector, it is by no means the only role for statisticians in insurance. The journal of International Statistical Review published an article examining other applications of statistics within insurance. Considering the range of products that insurance companies offer just under the umbrella of property and casualty (homes, cars, travel, worker benefits, etc.), the need for statisticians is great.

Statisticians are frequently employed to analyze:

  • Time to market
  • Competitive intelligence
  • Processes for quality improvement

Like any other company, insurance companies need to be clear on what the competition is offering, and how long it takes for new products to hit the market compared to competitors. They also need to be informed about how they can become more efficient (and cost-effective) in their day to day processes. Statisticians play a critical role in understanding the customer base. They determine who is in the market for a specific insurance product, what are the customer's needs, and what factors influence that customer's willingness to buy. 

Statisticians also engage in research and development of new insurance products. They typically survey potential customers to discern needs and wants, prepare data for analysis, and manage the development from an analytical standpoint. Other roles for statisticians in the insurance industry include those who analyze:

  • Claims for fraud
  • Cost estimation
  • Churn models (for customer retention)
  • Customer satisfaction
  • Key Performance Indicators

Education in Applied Statistics

If you are interested in a statistical career in the insurance sector or are looking to integrate analytics into your insurance organization, consider Michigan Technological University’s Masters in Statistics Online. The program is available entirely online and offers coursework in probability and statistics that are essential for work as an actuary or statistician in insurance. The program also emphasizes essential communication and leadership skills.

If you are ready for a career in an environment that is challenging and expanding, the role of a statistician in the insurance sector may be the right choice for you.

 

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