Page 184 - Ebook health insurance IC27

The Insurance Times

Data and modeling

 Data plays an important role in insurance business.
 An inaccurate data may lead to inaccurate pricing and thereby the whole insurance

cycle may get disturbed.

Actuaries use two types of data

1. Details of policies and insured members
2. Details of claims

 Data must be collected on a continuous basis right from the enrolment of the
customer till the payment of the claim.

 Once this system is in place for collection and collation of data by using the
modeling process it can be analysed for predicting the future with reasonable
accuracy.

 Thesemodelsaresimplistic formulatounderstand thecomplex reallive behaviors.
 There are various kinds of actuarial models available which helps actuaries in

predicting the future behaviors by analysing past claims.
 So the whole process of data and collection and analysis must be done carefully

and seriously so that the whole process of insurance can function efficiently.

188 Guide for Health Insurance