Research & Evidence-Based Practice Flashcards
7 cards from real Insurance practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Research & Evidence-Based Practice flashcards as text
In predictive modeling for insurance, what is 'overfitting'?
Answer: A model that performs well on training data but poorly on new data
Overfitting occurs when a model captures noise in training data rather than true patterns, reducing its predictive power on out-of-sample data.
Which data source would an actuary most likely use for credible industry-wide loss frequency benchmarks in the US property market?
Answer: ISO (Insurance Services Office) statistical databases
ISO collects and analyzes loss data from many insurers to produce industry-standard actuarial benchmarks used in ratemaking.
What is the difference between 'incurred losses' and 'paid losses' in insurance accounting?
Answer: Incurred losses include reserves for unpaid claims; paid losses are only amounts disbursed to date
Incurred losses equal paid losses plus the outstanding reserve for claims not yet fully settled, giving a complete picture of total expected cost.
A researcher uses a Generalized Linear Model (GLM) for auto insurance ratemaking. What is the primary advantage of GLMs over ordinary linear regression?
Answer: GLMs allow non-normal error distributions and link functions appropriate for insurance data
GLMs extend linear regression by accommodating non-normal distributions (e.g., Poisson for claim counts, Gamma for severity) that better fit insurance data.
What does 'external validity' mean in the context of an insurance research study?
Answer: The extent to which findings can be generalized beyond the study sample
External validity refers to whether a study's results can be applied to other populations, settings, or time periods outside the original research context.
In insurance fraud research, a 'propensity score' is used to:
Answer: Estimate the likelihood that a claim is fraudulent based on historical patterns
Propensity scores in fraud analytics estimate the probability that a claim has characteristics associated with fraudulent activity, enabling targeted investigation.
Which type of validity ensures that a survey used to measure policyholder satisfaction actually measures satisfaction and not something else?
Answer: Construct validity
Construct validity confirms that a measurement instrument truly captures the theoretical construct it is designed to measure, such as satisfaction.