Sample Dissertation Format - Scor

7 Reviewing Experience
It is vital that schemes monitor their experience by comparing the actual claims costs with
the expected costs that were calculated when pricing the scheme. This will allow the provider
to identify if the premiums collected were sufficient to cover its claims and expenses; and to
adjust the premiums for the following year to avoid further losses. The provider must also
monitor the expense to ensure the actual costs incurred during the year did not exceed the
expenses assumed in pricing.
A comprehensive data collection system should be in place to record all the member data and
claims data under the microinsurance schemes. This should enable experience analysis on
the claims and the expenses under the scheme. Chapter 28 of The Actuarial Education
Company (2010) explain the following on claims and expense analyses.
7.1 Claims Analysis
Claims analysis involves comparing the expected claims or risk premium amount to the actual
claims incurred in the past year. The actual claims should be divided by type of policyholder,
type of policy, type of medical facility used and, for PMI policies, into benefit procedure.
Claims should only be split into homogenous sub-groups if each sub-group has credible
amounts of data.
Analysing claims experience after a few years will allow the actuary to observe any trends in
claims amounts. This might give an indication of any benefit escalation or if the general
health of the target population is improving. This is especially important for health
microinsurance schemes where the success of the scheme might be measured by health
improvements in the target market.
7.2 Expense Analysis
The expense analysis will compare the loadings in the premium for expenses with the actual
expenses incurred over the year. This will allow the company to determine if it had any
expense overruns in the year and will allow the actuary to adjust the expense loading for the
future to avoid overruns.
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