Chapter 19 - Data

Question 1

Personal data

Answer 1

Allow an individual to be identified
Many protection laws
Sensitive data is more private

Question 2

Big data

Answer 2

Large data sets, different sources, analyzed quickly
May or may not include personal data, use anonimisation
Be transparent when collecting

Question 3

Data governance

Answer 3

Management of availability, usability, integrity and security of data
Should have robust data governance policy otherwise, legal, operational, reputation al and expense risks
Data governance is key during merger and acquisition

Question 4

Data risks

Answer 4

Inaccurate or incomplete
Not credible
Not sufficiently relevant
Past data does not reflect what will happen in the future
Chosen data groups might not be optimal
Data not available for intended purpose

Question 5

Algorithmic decision making

Answer 5

Automated asset trading is example where model risk arises

Question 6

Data requirements

Sources of data

Answer 6

Publicly available
Internal
Industry wide

Question 7

Industry wide data collection schemes

Not precisely comparable

Answer 7

Companies operate in different geographical or socio economic sections
Policies sold by different companies are not identical
Sales methods are not identical
Companies will have different practices
Nature of data stored will not be the same
Coding for risk factors may differ

Question 8

Industry wide data collection schemes

Additional problems

Answer 8

Data may be less detailed/flexible
Data may be more out of date
Data quality may be poor
Not all organisations contribute

Question 9

Checks on data

Answer 9

Recon of member/policy numbers
Recon of benefits and premiums
Movement data against accounts
Validity of dates
Consistency of contribution
Consistency between sum assured and premium
Consisteny of asset income data and accounts
The recon of beneficial owner and custodian records where assets owned by third party
Full deed audit for certain assets
Consistency between start and end period shareholdings
Records picked at random for spot checks

Question 10

Lack of ideal data

Answer 10

Insufficient volume

Data has not been captured at a sufficiently detailed level

Question 11

Risk classification and reduction of heterogeneity

Answer 11

Aim to have homogeneous data since heterogeneity distorts results
Removal of heterogeneity needs to be balanced against having sufficient data in each group