Data checks

Question 1

Reconciliations

Answer 1

• Reconcile latest results with previous results, eg for lapse data:
o Num pol in force at end of period= num at start + num new pol – num exits
• Could carried out for each product class and year
• Check results of an analysis of surplus

Question 2

Cross checks

Answer 2

• Check data against other sources
o Eg check accounting data vs data used to administer contracts
• Check for consistency between claims and exposed to risk data

Question 3

Reasonableness checks

Answer 3

• Check whether rates consistent with what was expected
• Check is rates reasonable compared to previous rates
• The drivers of rates should be analysed
o Consider how rates differ by SA, prem size, entry year, dist channel, calandar year etc
o Will help to explain any differences vs industry data
• Ensure no clustering of dates (claim/ lapse) – may suggest system error
• Consider rate measure – unweighted or weighted by eg prem size
• Check changes in business mix

Question 4

Spot check

Answer 4

Eg for lapse rates, check a policy to determine when it lapsed and check against when last premium was received