CH 1 Big Data Analysis

Question 1

Greatview Insurance wants to predict which auto liability claims will most likely go to litigation, so it can assign them to experienced adjusters early in the process. There are certain known indicators of litigation that Greatview wants to use in the data mining process. Which one of the following data mining techniques would Greatview’s analyst most likely use?

Answer 1

Classification.
Because Greatview wants to use known characteristics, the analyst would most likely use classification to predict which auto liability claims will go to litigation.

Question 2

Which one of the following is a way that insurers and risk managers can use data science to improve their results through data-driven decision making?

Answer 2

Discovering new relationships in data.
Discovering new relationships in data is a way insurers and risk managers can use data science to improve their results through data-driven decision making.

Question 3

Gabrielle is a claims representative from Onward Insurance. She is using external data to verify some information as part of a claims investigation. In doing so, Gabrielle will likely rely on all of the following sources of information, EXCEPT:

Answer 3

The claimant’s recorded statement given to Gabrielle.
“The claimant’s recorded statement given to Gabrielle” is considered internal data, not external data. All other answers represent external data.

Question 4

Data scientists at Grisham Risk and Insurance are working with underwriting, claims, and other department professionals to design data mining projects to help generate better business solutions and decisions. Which one of the following is true regarding this collaboration at Grisham?

Answer 4

The data scientists will explore underutilized sources of data, such as social media and social networks.

Question 5

Technology that can particularly assist adjusters in evaluating claims after catastrophes is

Answer 5

Drones.

Technology that can particularly assist adjusters in evaluating claims after catastrophes is drones.

Question 6

Data science is especially useful for

Answer 6

Unstructured data.

Question 7

Galliano Insurance Agency knows that it is most likely to retain the customers that it insures for multiple lines of coverage. The agency is always trying to identify new insurance products. To help identify new products, it needs a data mining technique that will explore data to find groups with common and previously unknown characteristics. Which one of the following data mining techniques should Galliano Insurance Agency use?

Answer 7

Cluster analysis.

Galliano Insurance Agency should use cluster analysis to identify possibilities for new insurance products.

Question 8

Tania works in the fraud unit for Greatview Insurance. There is a claimant who appears to be involved in multiple cases of insurance fraud. Tania decides to use social media to obtain information that may be used to develop a profile of the claimant. Tania’s use of social media is an example of which one of the following types of data?

Answer 8

Unstructured external.
Tania’s use of social media to provide information for fraud investigation is an example of using unstructured external data.

Question 9

The purpose of data analytics for insurers is to

Answer 9

Make data-driven decisions and strategy.

The purpose of data analytics for insurers is to make data-driven decisions and strategy.

Question 10

The first step in the data mining process is to

Answer 10

Understand what a business wants to achieve.

The first step in the data mining process is to understand what a business wants to achieve.

Question 11

The important first step in a decision-making model is to

Answer 11

Define the problem.

The important first step in a decision-making model is to define the problem.

Question 12

Which one of the following correctly describes a new evolution of big data, sometimes referred to as big data 2.0 in insurance and risk management?

Answer 12

Organizations can strategically use data from the Internet of Things and vehicle telematics.
Organizations can strategically use data from the Internet of Things and vehicle telematics.

Question 13

Which one of the following correctly describes classification?

Answer 13

Classification assigns members of a dataset into categories based on known characteristics.
Classification assigns members of a dataset into categories based on known characteristics.

Question 14

Which one of the following is correct regarding an insurer’s big data?

Answer 14

An insurer’s big data consists of both its own internal data and external data.

Question 15

Which one of the following is a fundamental concept of data science?

Answer 15

The selection of data mining approaches must be considered in the context in which the results will be applied.

Question 16

A project team at Goshen Mutual has been working on developing a new product for the personal insurance market. The team is using geodemographic data to determine which territories would be the best to introduce the product. Geodemographic data would be categorized as

Answer 16

Structured external data.

Geodemographic data would be categorized as structured external data.

Question 17

The descriptive approach is applied

Answer 17

When an insurer or risk manager has a specific problem

Question 18

All of the following are fundamental concepts of data science, EXCEPT:

Answer 18

The data mining project need not provide actions that lead to better business results in order to be considered worthwhile.
All are fundamental concepts of data science except “the data mining project need not provide actions that lead to better business results in order to be considered worthwhile.” The selection of data mining approaches and evaluation of the results must be thoughtfully considered according to how the results will be applied.

Question 19

Which one of the following is correct regarding data science teams in insurance and risk management organizations?

Answer 19

Risk management and insurance professionals can be valuable members of data science teams.

Question 20

Which one of the following is a data mining technique an insurer applies when it knows what information it wants to predict?

Answer 20

Classification

Classification is a data mining technique an insurer applies when it knows what information it wants to predict.

Question 21

Data scientists must be able to

Answer 21

Analyze traditional data as well as new types.

Question 22

The insurance professionals who have traditionally analyzed data and made predictions based on their analyses are

Answer 22

Actuaries.

Question 23

Big data includes

Answer 23

Both structured and unstructured data.

Big data includes both structured and unstructured data.

Question 24

Which one of the following can be applied over time to refine a model to better predict results?

Answer 24

Machine learning

Question 25

Which one of the following is a characteristic that differentiates big data from traditional data?

Answer 25

Velocity

Question 26

Reynolds Insurance provides workers compensation insurance for small to medium sized companies, mostly to its local and regional manufacturers. For data science to be relevant and useful to Reynolds, which one of the following types of technology would be its best investment?

Answer 26

Harnessing the Internet of Things data to analyze data from wearables such as hardhats and steel-toed boots.
The most relevant and useful technology would be harnessing the Internet of Things data to analyze data from wearables such as hardhats and steel-toed boots.

Question 27

Insurers can benefit from

Answer 27

A framework they can use to approach problems through data analysis.

Question 28

Gustav is a claims representative from Forefront Insurance. He is accessing online weather reports to determine hazardous road conditions alleged by an injured claimant. These weather reports are an example of which one of the following types of data?

Answer 28

External unstructured data
Online weather reports are external (not owned by the insurer) and unstructured (not organized into predetermined fields or databases).

Question 29

Which one of the following is correct about data science?

Answer 29

Data science is a new field that arose from the need to link big data and technology to provide useful information.

Question 30

Which one of the following is a legal and regulatory concern in obtaining mass information from social media?

Answer 30

Privacy

Question 31

Durham Insurance insures many trucking operations and has a large database of loss experience. It wants to know how many hours a driver can drive without taking a break before the likelihood of having an accident increases. Which one of the following data mining techniques would an analyst use to predict the number of hours?

Answer 31

Regression analysis

An analyst would use regression analysis to predict the number of hours based on the information in the database.