CH:39 Monitoring

Question 1

What is the reasons for monitoring experience?

Answer 1

• update the method and assumptions so that they are more relevant to future experience
• monitor any trends in experience
• provide management information

Question 2

Why should the results from analysis of experience not be used blindly?

Answer 2

• whether the period under investigation was typical (without one-off event)
• whether the experience will be representative of future experience

Question 3

What allowances should be made for in the results of analysis of experience

Answer 3

• trends
• cycles
• abnormal events
• random fluctuations

Question 4

What is the stages of Monitoring investigations

Answer 4

1. division of data into suitable groups that are homogeneous by risk, need to consider:
   * volume of data in each cell
   * risk factors for the investigation (eg, age, gender)
   * changes that have occurred that will reduce the relevance of old data
2. identification of any past trends, cycles and anomalies and random variation in the past data
3. using results to revise models and assumptions used, need to consider
   * purpose, and hance need for accuracy and margins for prudence
   * allowance for future trends
   * likely differences in future experience from past experience