Pricing in General Insurance

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10

Data Preparation

Modelling is rarely an automated process by which one transforms a raw set of data into a

set of results. Before any modelling can be attempted, a signicant amount of exploratory

work often needs to be carried out on the raw data. For lack of a standard term, we call this

exploratory work ‘data preparation’ (Figure 10.1). This is often an open-ended exercise but

will normally involve the following activities:

• Checking data to determine whether there are errors or anomalies

• Summarising data to provide a bird’s-eye view of the risk and understand obvious

trends/anomalies

• Preparing a standardised input for the rest of ...