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Casualty Actuarial SocietyRatemaking Seminar
Tampa, 2002
INT-1
Introductory Data Management 101
Al Hapke
ASPECT, Inc.
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Your Role in Data Management
• Demanding User
• Lack of defined needs
• Lack of knowledge about information technology
• Lack of business knowledge in the IT staff
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Therefore, you must communicate your goals effectively and clearly.
Objective of Data Management:
To store and organize data in a way that allows the analyst to answer questions about the business.
These questions should help direct and guide the management of the business.
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Processing Systems are not adequate to satisfy the analytical needs of the company.
They’re designed to do work, not answer questions.
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Steps That Help Communication:
• Formulate many specific questions– Brainstorm yourself– Talk to your customers/clients/boss– Read actuarial papers– Review competitive rate filings
• Write them down
• Design your spreadsheet or model to answer the question
• Determine what you need to populate the spreadsheet
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Example of Questions:
What do we expect to pay for claims in this class vs. other classes?
1. Age/experience of driver
2. WC class code
3. Property construction
4. State/territory/location
5. Other characteristics such as credit rating,
new/renewal, etc.
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Issues with this Question:
• Volume in each class or characteristic
• How much history?
• Can premium be appropriately matched with losses?
• Can earned exposures be captured?
• Can class definitions be multidimensional?
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Other Questions:
• What is our exposure to maximum loss?– Answer can be found in limit/location studies
• How much development can we expect on reported losses?– Considerations:
• Report date
• Historical claim distributions
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Other Questions (continued)
• Has our underlying book of business changed?– What types of losses are we seeing?
• This is only meaningful if we have been profiling our mix of claims so that we can see what’s different.
• e.g– Size of loss at consistent points in time
– Minor coverage detail
– Cause of loss
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Other Questions (continued)
• Who, how much, and what is your producer selling?
What are the characteristics of the business being brought in the front door?
Or…. Leaving through the back door?
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Issues to Consider in Your Management Information System
• Ease of Access - level of independence
from programmers
• Flexibility - new classes, new
characteristics, new products
• Quality of data