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

A motor insurer's claims file has 2,000 records. A check shows 120 records with a missing vehicle age, 40 exact duplicate records, and 60 records with a negative claim amount. The 40 duplicates are removed, and the 60 negative amounts are found to be genuine recoveries and are kept. What percentage of the cleaned file (after duplicate removal) has a missing vehicle age, assuming no duplicate had a missing vehicle age?

The cleaned file has 1,960 records after removing 40 duplicates, and all 120 missing vehicle ages remain, so the proportion is 120/1,960, about 6.12%. Using the original 2,000 records as the base would be incorrect.

  1. A5.5%
  2. B6.0%
  3. C6.12%Correct
  4. D7.0%
  5. 3.06%

Explanation

After removing 40 duplicates the file has 2,000 - 40 = 1,960 records. None of the duplicates had a missing age, so all 120 missing values remain. 120/1,960 = 6.12%. Using 2,000 as the base gives 6.0%, which is wrong because the base should be the cleaned file.

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