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

A general insurer in Pune wants to understand how motor claim frequency has varied across vehicle types over the past five years, with no intention of forecasting or testing a specific hypothesis. Which type of data analysis does this describe?

This is descriptive analysis. The insurer only summarises and presents how past claim frequency varied by vehicle type. It does not generalise to a wider population, as inferential analysis does, or forecast future claims, as predictive analysis does.

  1. AInferential analysis
  2. BPredictive analysis
  3. CDescriptive analysisCorrect
  4. DConfirmatory hypothesis testing
  5. Stochastic simulation

Explanation

Summarising and presenting patterns in historical data, without generalising to a population or forecasting, is descriptive analysis. Inferential analysis would draw conclusions about a wider population, and predictive analysis would forecast future claims.

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