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IAI Actuarial Core Principles · Actuarial Statistics · Purpose and function of data analysis

A general insurer in Pune wants to examine last year's motor claims to describe the average claim size, the spread of claims and the presence of unusually large claims, without testing any hypothesis or predicting future claims. Which type of data analysis is this?

This is descriptive analysis. The insurer is only summarising the observed claims, using their average, spread and outliers. It makes no generalisation to a wider population, tests no hypothesis and forecasts no future claims, so inferential and predictive analysis do not apply.

  1. ADescriptive analysisCorrect
  2. BInferential analysis
  3. CPredictive analysis
  4. DPrescriptive analysis
  5. Confirmatory analysis

Explanation

Summarising the features of the data actually observed, such as the mean, spread and outliers, is descriptive analysis. Inferential analysis would generalise to a population, and predictive analysis would forecast new outcomes. Neither is required here.

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