Useful Tools for Assessing Claims Fluctuation

As a research actuary, writes Transamerica Reinsurance's David Wylde, he sometimes is asked if the statistics used in his work have any basis in the real world. Or, in other words, how does applied statistical theory stack up against experience?

A case in point is year-to-year death claims analysis – where actual claims often deviate from expected. These claims deviations can be simply the result of statistical variance about the mean, or they may indicate the need to revise expectations. To demonstrate the statistics used in determining whether a change in expected claims is warranted, proprietary Transamerica Experience Database (TED) experience is integrated into an experiment comparing historical claims variance against theoretical predictions.

http://www.transamericareinsurance.com/Media/media_associateArticle.aspx...