Chapter 8 (Big data) quiz KATHRYN

Currently, insurers process which portion of their available structured data? Choose one answer. A. A low percentage B. A medium percentage C. A high percentage D. A variable percentage

A. A low percentage

Greatview Insurance wants to predict which auto liability claims will most likely go to litigation, so it can assign them to experienced adjusters early in the process. There are certain known indicators of litigation that Greatview wants to use in the data mining process. Which one of the following data mining techniques would Greatview's analyst most likely use? Choose one answer. A. Regression analysis B. Classification C. Cluster analysis D. Association rule learning

B. Classification Correct. Because Greatview wants to use known characteristics, the analyst would most likely use classification to predict which auto liability claims will go to litigation.

Technology that can assist adjusters in evaluating claims after catastrophes is Choose one answer. A. Telematics. B. Drones. C. Wearables. D. Sensors.

B. Drones

Which one of the following can be applied over time to refine a model to better predict results? Choose one answer. A. Regression B. Machine learning C. Statistics D. Association rule learning

B. Machine learning

Which one of the following correctly describes the stage of Big Data 2.0 in insurance and risk management? Choose one answer. A. Organizations have just started conducting business on the Internet. B. Organizations can obtain vast amounts of information C. Insurers are exploring the possibility of underwriting personal lines over the Internet. D. Insurers are using the Internet to market their products to customers.

B. Organizations can obtain vast amounts of information rapidly to develop useful knowledge. Correct. Organizations can obtain vast amounts of information rapidly to develop useful knowledge.

Which one of the following is a legal and regulatory concern in obtaining mass information from social media? Choose one answer. A. Fraud B. Privacy C. Veracity D. Volume

B. Privacy Correct. Privacy is a legal and regulatory concern in obtaining mass information from social media.

A predictive approach to data analytics involves Choose one answer. A. Providing information to solve a particular problem. B. Providing a method to be used repeatedly to provide information. C. Providing sensors that predict accidents. D. Providing a computer program to gather information from the Internet.

B. Providing a method to be used repeatedly to provide information

The purpose of data analytics for insurers is to Choose one answer. A. Eliminate the need for human analysis. B. Automate most organizational processes. C. Make data-driven decisions and strategy. D. Acquire and use all the new types of technology.

C. Make data-driven decisions and strategy

In order to be useful, data should be Choose one answer. A. Structured. B. Unstructured. C. Structured or unstructured. D. Internal.

C. Structured or unstructured

A source of a rapidly growing quantity of external data is Choose one answer. A. Industry loss data. B. Risk management and insurance professionals. C. The Internet of Things. D. Computers.

C. The Internet of Things. Correct. A source of a rapidly growing quantity of external data is the Internet of Things.

Which one of the following is correct about data science? Choose one answer. A. Data science is a new field that arose from the need to link big data and technology to provide useful information. B. Data science is traditional computer programming that is applied to larger amounts of data. C. Data science is a field within mathematics that uses new mathematical concepts to analyze data. D. Data science automates all data processing and eliminates the need for human involvement.

A. Data science is a new field that arose from the need to link big data and technology to provide useful information

Which one of the following is a way that insurers and risk managers can use data science to improve their results through data-driven decision making? Choose one answer. A. Discovering new relationships in data B. Determining prior year losses at a particular location C. Providing human analysis of data D. Using industry data in addition to the organization's own data

A. Discovering new relationships in data

Durham Insurance insures many trucking operations and has a large database of loss experience. It wants to know how many hours a driver can drive without taking a break before the likelihood of having an accident increases. Which one of the following data mining techniques would an analyst use to predict the number of hours? Choose one answer. A. Regression analysis B. Cluster analysis C. Association rule learning D. Classification

A. Regression Analysis

The most important reason for risk management and insurance professionals to learn about data analytics is Choose one answer. A. To design analytical models in their areas of expertise. B. Because big data and technology are central to the insurance industry. C. To be able to conduct analyses of social media. D. To propose new ideas for technology to provide data.

B. Because big data and technology are central to the insurance industry

Which one of the following is a characteristic that differentiates big data from traditional data? Choose one answer. A. Structure B. Velocity C. Privacy D. Fraud

B. Velocity

The descriptive approach is applied Choose one answer. A. When an insurer or risk manager is deciding what type of computer technology to purchase. B. When an insurer or risk manager has a specific problem. C. Repeatedly to provide information for data-driven decision making. D. To process information received from the Internet of Things.

B. When an insurer or risk manager has a specific problem. Correct. The descriptive approach is applied when an insurer or risk manager has a specific problem.

Which one of the following is correct regarding an insurer's big data? Choose one answer. A. An insurer's big data consists only of its own internal data. B. An insurer's big data consists only of new types of external data. C. An insurer's big data consists of both its own internal data and external data. D. Most insurers do not currently possess any big data.

C. An insurer's big data consists of both its own internal data and external data

Big data includes Choose one answer. A. Structured data only. B. Unstructured data only. C. Both structured and unstructured data. D. Neither structured nor unstructured data.

C. Both structured and unstructured data

Which one of the following correctly describes classification? Choose one answer. A. Classification explores data to find groups with common and previously unknown characteristics. B. Classification develops algorithms to develop rules to apply to new data. C. Classification assigns members of a dataset into categories based on known characteristics. D. Classification predicts a numerical value given characteristics of each member of a dataset.

C. Classification assigns members of a dataset into categories based on known characteristics

Which one of the following correctly describes cluster analysis? Choose one answer. A. Cluster analysis explores data to find groups with common and previously unknown characteristics. B. Cluster analysis develops algorithms to develop rules to apply to new data. C. Cluster analysis predicts a numerical value given characteristics of each member of a dataset. D. Cluster analysis assigns members of a dataset into categories based on known characteristics

C. Cluster analysis explores data to find groups with common and previously unknown characteristics. Rationale: Cluster analysis explores data to find groups with common and previously unknown characteristics.

Data science is especially useful for Choose one answer. A. Structured data. B. Internal data. C. Unstructured data. D. Databases.

C. Unstructured Data

Tania works in the fraud unit for Greatview Insurance. There is a claimant who appears to be involved in multiple cases of insurance fraud. Tania decides to use social media to obtain information that may be used to develop a profile of the claimant. Tania's use of social media is an example of which one of the following types of data? Choose one answer. A. Structured external B. Structured internal C. Unstructured external D. Unstructured internal

C. Unstructured external Correct. Tania's use of social media to provide information for fraud investigation is an example of using unstructured external data.

Which one of the following is a data mining technique an insurer applies when it knows what information it wants to predict? Choose one answer. A. Association rule learning B. Cluster analysis C. Machine learning D. Classification

D. Classification Correct. Classification is a data mining technique an insurer applies when it knows what information it wants to predict.

Galliano Insurance Agency knows that it is most likely to retain the customers that it insures for multiple lines of coverage. The agency is always trying to identify new insurance products. To help identify new products, it needs a data mining technique that will explore data to find groups with common and previously unknown characteristics. Which one of the following data mining techniques should Galliano Insurance Agency use? Choose one answer. A. Regression analysis B. Association rule learning C. Classification D. Cluster analysis

D. Cluster Analysis

The important first step in a decision-making model is to Choose one answer. A. Prepare the data. B. Purchase the technology. C. Assign a data scientist. D. Define the problem.

D. Define the problem

Which one of the following is correct regarding insurers' and risk managers' internal data? Choose one answer. A. Insurers and risk managers have traditionally used all their internal data. B. Insurers and risk managers report all their internal data to regulatory agencies. C. Insurers and risk managers are not required to report their internal data. D. Insurers and risk managers have vast quantities of internal data they have not used.

D. Insurers and risk managers have vast quantities of internal data they have not used.