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8 Cards in this Set

  • Front
  • Back
Main focuses of this chapter:
 Using Internal Data and External Data
 Data Quality Issues
 Data Structures (in the computer science sense)

There’s very little that is unique in this chapter. Most of it is covered in my General Notes.
Responsibilities of the Actuary regarding usage of data:
 Quote the entire General-Data Quality Issues.
Uses Of External Data & Uses Of Internal Data
 Quote the entire General-Data Sources: Internal vs. External Data
Actuarial Information Systems (AIS’s)
AIS’s are programs that allow the Insurance Company to analyze its internal data.
 AIS’s are designed to facilitate reporting rather than processing
 AIS’s allow hands-on manipulation of data
 They are often used for:
 computing reserves
 trend analysis (utilization, mortality, medical costs)
 experience monitoring
 ratesetting
 provider/network analysis (utilization, etc.)
Data Storage Methods
 On-line – means the file is located on disk or server storage that is immediately available for use.
 Near line – the file is compressed, but the compressed file is located on an immediately-available disk or server.
 this is cheaper than on-line storage
 it’s a compromise between online and offline: you have to decompress the data before you can use it, but that step is reasonably quick.
 overall, more efficient, because it takes less hard disk space or server disk space.
 Off-line – the file is located on a removable magnetic tape or floppy disk
 least expensive storage method
 but access is slowest.
 This storage method should only be used for sequential data which does not need to be accessed often. For example, a monthly backup file of the customer database.
 Trade-off: On-line is the most efficient, but requires the most expensive equipment and storage media. Off-line is cheapest but least efficient.
Types of Data Structures
 Sequential File – A simple list of all the data for a specific application
 e.g. a premium billing record, listing all the employer groups and their premiums.
To search for particular data in a sequential file, the computer must scan all the records until the desired record is found. Even if the data are listed in ascending order, searching is still slow.
 Indexed Sequential File – A list of data records with indexes of the key elements.
(The indexed elements are SSN, Policyholder Name, Contract #, etc; anything you would use to sort the data).
 Indexed data is easily searchable/sortable. Therefore it is often useful for more than one application.

 Relational Database – several indexed files linked together.
 data are grouped into separate indexed tables
 Given any piece of data, all related data from any of the tables can quickly be displayed
 Requires most storage space
Examples: Microsoft FoxPro, Microsoft Access, Oracle

 Dimensional Database
 Contains even more linkage than a relational database. (I think this is a type of fuzzy logic system)

 Trade-off: The more advanced kinds are efficient but most expensive. Sequential is cheapest but slowest.

 The Data Storage media and the Data Structure both affect the speed at which a desired piece of data can be accessed.
Considerations in Choosing the Data Storage Method and Data Structure
 The desired ability to manipulate (use) the data
 The available storage space
 Volume of Data
 Large data files need structuring in order to minimize processing time
 They also require more storage space; on-line storage isn’t possible.
 The desired frequency of use
 Frequently accessed files require relational databases, because sequential files take too much time to access.
 Retrieval Speed desired
 On-line is fastest to access
 Off-line data is slowest to access
 Near-line is a compromise
 Trade-Off: Ease of Programming vs. Accessibility.
 Complex data structures are harder to create, but allow data to be accessed in a number of ways. They are more efficient in the long-run.
Sources of Internal Data
 Quote the entire General-Data Sources: An MCO’s Internal Data Sources.