CH18 - Data Flashcards
1
Q
Data risks (6)QUERIED
A
- the data are inaccurate or incomplete
- the data are not credible due to being of insufficient volume, particularly for the estimation of extreme outcomes
- the data are not sufficiently relevant to the intended purpose
- past data may not reflect what will happen in the future
- chosen data groups may not be optimal
- the data are not available in an appropriate form for the intended purpose
2
Q
Main sources of data (2)
A
- publicly available data
2. internal data
3
Q
Reasons for poor data (2)
A
- poor management control of data recording or its verification processes
- poor design of the data systems
4
Q
Checks on data (11)
A
Looking at:
- reconciliations of member / policy numbers
- reconciliations of benefits and premiums
- movement data against accounts
- validity of dates
- consistency of contribution and benefit levels with the accounts
- consistency between average sum assured and premium for each class, and when compared with previous investigations
- consistency of asset income data and accounts
- the reconciliation of beneficial owner and custodian records where assets are owned by a third party
- full deed audit for certain assets, e.g. property
- consistency between start and end period shareholdings
- records picked at random for spot checks
5
Q
Lack of ideal data (2)
A
The main circumstances under which ideal data are not available are because:
- there is insufficient volume to provide a credible result
- the data have not been captured at a sufficiently detailed level
6
Q
Reasons why data supplied by different companies may not be precisely comparable (6) + (4)
A
- companies operate in different geographical or socio-economic sections of the market
- the policies sold by different companies are not identical
- sales methods are not identical
- the companies will have different practices, e.g. underwriting, claim settlement
- the nature of the data stored by different companies will not always be the same
- the coding used for the risk factors may vary from organisation to organisation
In addition problems may arise as:
- the data may be less detailed / flexible
- the data may be more out-of-date
- the data quality may be poor
- not all organisations contribute and those that do may not be representative of the market as a whole