Question

Why is important to calculate the mean of the claim amount paid over the time period and the mean of the number of claims incurred over the time period?

Answer 1

Mean of the claim amount paid over the time period is necessary to be calculated in order to get a figure about the average claim amount processed which would give an idea about the average cost incurred on the claim amount. This data is necessary from the point of view of claim processing arm of the organization.

Mean of the number of claims incurred over the time period is necessary to be known because the average number of claims per day or per week or per month can be ascertained which would give a sense about the rate of claims incurred over a specific time period which in turn would help the organization to keep up with the rate of claims incurred and increase the rate of claim processing as well.