Adjustments to claims data

[tjcchan]

I come across many questions regarding calculating risk premiums - one of things i need to do is to make adjustments on claims

the possible adjustments are for

unusually light and heavy experience

large claims

trends in claims experience

changes in risk (this is the change in the underlying nature of the riskt? both external and internal changes?) -

changes in cover - is this the same as changes in terms and conditions?

cost of reinsurance

However, there are also other lists that I've come across under claims analysis (i.e. possible distortions in the claims data)
these are

absence and presence of large claims
external influences such as cat/inflation/changes in the underlying nature of the risk
internal influences such as changes in underwriting, claim handling, settlement, recording, processing and reinsurance arrangements
random variations
changes in type of business attracted within the class or types of claims emerging


I understand there are overlaps here, but shall I throw the rest of them in as well? Or are there other questions for which these are more appropriate?

Also in claims analysis, the notes mentioned aspects of claims data that should be checked before proceeding with claims analysis -

ensuring consistency from year to year in claims definition/ treatment of nil claims/claims administration
making adjustments
large claims
concentration of claims
unsettled o/s claims
re-opened claims
IBNR
changes in development pattern
heterogeneity caused by combining data groups together

Where shall these be used??

 

[Coralie Clarke]

Hi,

As you've said, there are overlaps between the lists you've given.

If appropriate (i.e. relevant to the question being asked and to the number of marks available for the question) then you should include all of them in your answer.

If they're not relevant to the particular question then don't include them, e.g. if you have a class of business with fixed benefits then don't start mentioning large claims.

Also, remember to look at the number of marks available - this will give you an idea of the level of detail required.

Coralie