Methods that insurers use to estimate future losses include: I Frequency and severity analysis II Regression...

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Question

Methods that insurers use to estimate future losses include: I Frequency and severity analysis II Regression...

Methods that insurers use to estimate future losses include:

I Frequency and severity analysis

II Regression analysis

A. I only

B. II only

C. Both I and II

D. Neither I nor II

business finance

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Answer 1

Answer #1

Frequency-severity method is a method used by insurers that uses
historical data to estimate the average number of claims and the
average cost of each claim.
The frequency-severity method multiplies the average number of
claims with the average cost of each claim to estimate future losses.

Regression analysis is a statistical analysis that determines
the relationship between 1 dependent variable
and either 1 or multiple independent variables.
There are two types of regression analysis, linear regression
and multiple regression.
Regression is used mostly in finance and investing.

A. I only

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Answer 2

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