CH18 - Data Flashcards

1
Q

Data risks (6)QUERIED

A
  1. the data are inaccurate or incomplete
  2. the data are not credible due to being of insufficient volume, particularly for the estimation of extreme outcomes
  3. the data are not sufficiently relevant to the intended purpose
  4. past data may not reflect what will happen in the future
  5. chosen data groups may not be optimal
  6. the data are not available in an appropriate form for the intended purpose
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2
Q

Main sources of data (2)

A
  1. publicly available data

2. internal data

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3
Q

Reasons for poor data (2)

A
  1. poor management control of data recording or its verification processes
  2. poor design of the data systems
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4
Q

Checks on data (11)

A

Looking at:

  1. reconciliations of member / policy numbers
  2. reconciliations of benefits and premiums
  3. movement data against accounts
  4. validity of dates
  5. consistency of contribution and benefit levels with the accounts
  6. consistency between average sum assured and premium for each class, and when compared with previous investigations
  7. consistency of asset income data and accounts
  8. the reconciliation of beneficial owner and custodian records where assets are owned by a third party
  9. full deed audit for certain assets, e.g. property
  10. consistency between start and end period shareholdings
  11. records picked at random for spot checks
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5
Q

Lack of ideal data (2)

A

The main circumstances under which ideal data are not available are because:

  1. there is insufficient volume to provide a credible result
  2. the data have not been captured at a sufficiently detailed level
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6
Q

Reasons why data supplied by different companies may not be precisely comparable (6) + (4)

A
  1. companies operate in different geographical or socio-economic sections of the market
  2. the policies sold by different companies are not identical
  3. sales methods are not identical
  4. the companies will have different practices, e.g. underwriting, claim settlement
  5. the nature of the data stored by different companies will not always be the same
  6. the coding used for the risk factors may vary from organisation to organisation

In addition problems may arise as:

  1. the data may be less detailed / flexible
  2. the data may be more out-of-date
  3. the data quality may be poor
  4. not all organisations contribute and those that do may not be representative of the market as a whole
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