‘Assumptions are always a challenge for Actuaries. How to check them?’
How to monitor actuarial assumptions regarding claim frequency in practice?
By Stéphane Loisel
|STÉPHANE LOISEL holds a PhD in applied mathematics from the University of Lyon, an MSc in actuarial science and finance, and is a fellow and former member of the board of the Institut des Actuaires. He is now full professor and head of LSAF research lab at ISFA, Université Lyon 1.
In insurance, it is important to continuously monitor actuarial assumptions, and particularly the ones regarding claim frequency. If one does not react quickly enough to a claim frequency increase, then one may face adverse selection. In the case of a claim frequency decrease, competition is at stake.
This article represents the opinion of the author, and not necessarily the opinion of the AAE.
This article was published in The European Actuary No. 26 – June 2021