Chapter 13 Data Flashcards

-Apply the techniques used in pricing health and care insurance products in terms of data availability

1
Q

General data considerations

A
  • Data availability
  • Making adjustments for credibility and relevance
  • Projection to midpoint of insurance usage
  • Group business
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2
Q

Data availability and criteria

A
  • Important component of premium charge is the risk premium should be as accurate as possible for period of cover.
  • most appropriate statistics should be used, should be relevant & credible
  • cost of obtaining data
  • & suitability of format in which data is in should be considered as well.
  • actuary will use judgement in calculating statistics,
  • using these to project data in order to estimate for future claims
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3
Q

Making adjustments for credibility & relevance

A
  • adjust data to meet the requirement of exercise being performed.
  • more accurate allowances can be made where insurer’s own experience is greater.
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4
Q

Projection to midpoint of insurance usage

A
  • Claim incidence rates will vary by age & calendar year.
  • Claim termination rats will also vary by duration from claim inception.
  • CI incidence rates should be analysed & projected by each claim cause then combined.
  • PMI incidence rates and average claim costs should be analysed and projected for each benefit of treatment category separately.
  • Rates should then be projected to midpoint of insurance usage.
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5
Q

Group business

A

-Chapter 20 covers this

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6
Q

Own data characteristics

A
  • Most relevant source of data
  • may not be credible, especially if data is broken into many risk cells.
  • It may need to be supplemented with external data
  • actuary may need to make adjustments to external data to make it appropriate.
  • cost, format & reliability should not cause problems.
  • for new insurer the actuary will rely on other sources of data not internal.
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7
Q

Population data merits

A
  • this will not be fully relevant to the insured lives or insurance products, eg claim definition.
  • It should be very credible
  • Disadvantages of population data
  • questionable accuracy and reliability
  • inappropriate format
  • may be out-of-date
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8
Q

Reinsurers’ data merits

A
  • The reinsurer should make the data as relevant as possible, although further adjustments may be needed for company’s specific underwriting & claims management.
  • Reinsurance premiums will be based on premiums calculated by insurer hence determine treaty profits.
  • Credibility will vary but more credible than own data
  • reinsurer will likely provide data in return for a share of business.
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9
Q

Market data merit: Insured lives data

A
  • this should be more relevant than population data as it is based on local experience of insured lives
  • May not be relevant to individual insurers and by time it is published, may be out of date.
  • it should be credible.
  • draw back is remains market average doesnt relate to one insurer.
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10
Q

Data obtained from returns to the insurance supervisor merits

A
  • These are likely to be accurate
  • may be hard to extract useful information
  • more likely to be used for an overall check of other data sources.
  • the data has national relevance to company concerned. However care should be exercised since policy conditions might differ.
  • This data should be more credible than insurer’s own data but less credible than population data.
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11
Q

Other sources of ata

A
  • overseas data
  • actuarial consultants
  • rate table software
  • trade magazines
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12
Q

Overseas data merits

A
  • may not be particularly relevant

- however may be credible

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13
Q

Actuarial consultants data merits

A
  • similar to reinsurers’ data

- however likely to have less of an interest in risk

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14
Q

Rate table software data merits

A
  • use to gather initial data

- or checking final premiums rates

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15
Q

Trade magazines data merits

A

-may be useful for checking final results
-will lack detail breakdown.
-will not include claim statistics but only level of benefits offered
and premium rates charge by other companies.

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16
Q

Data required for each of the products

A

Exposure + Incident info

CI

LTCI

PMI