Question

How are estimates for smaller and simpler claims typically determined?

a.

Based on subjective judgment of experienced handlers

b.

Using complex mathematical models

c.

Derived from average figures from past experience

d.

Obtained directly from clients

Posted under IC 14 Regulations of Insurance Business

Answer: (c).Derived from average figures from past experience Explanation:Estimates for smaller and simpler claims are typically derived from average figures from past experience. Claims handlers may use historical data and statistical analysis to determine an average figure that reflects the typical cost of such claims, adjusting for factors like inflation to make the estimate as realistic and up-to-date as possible.

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Q. How are estimates for smaller and simpler claims typically determined?
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