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Trends in disguise

Published online by Cambridge University Press:  16 September 2014

Vytaras Brazauskas ,
Bruce L. Jones  and
Ričardas Zitikis
Vytaras Brazauskas*
Affiliation:
Department of Mathematical Sciences, University of Wisconsin-Milwaukee, P.O. Box 413, Milwaukee, Wisconsin 53201, U.S.A
Bruce L. Jones
Affiliation:
Department of Statistical and Actuarial Sciences, University of Western Ontario, London, Ontario N6A 5B7, Canada
Ričardas Zitikis
Affiliation:
Department of Statistical and Actuarial Sciences, University of Western Ontario, London, Ontario N6A 5B7, Canada
*
*Correspondence to: Vytaras Brazauskas, Department of Mathematical Sciences, University of Wisconsin-Milwaukee, P.O. Box 413, Milwaukee, WI 53201, USA. Tel: 414-229-5656; Fax: 414-229-4907; E-mail: vytaras@uwm.edu
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Abstract

Human longevity is changing, but at what rate? Insurance claims are increasing, but at what rate? Are the trends that we glean from data true or illusionary? The shocking fact is that true trends might be quite different from those that we actually see from visualised data. Indeed, in some situations the upward trends (e.g. inflation) may even look decreasing (e.g. deflation). In this paper, we discuss this “trends in disguise” phenomenon in detail and offer a way for estimating true trends.

Keywords

DeductibleDeflationInflation rateInsurance claimsPolynomial Pareto distribution
Type
Papers
Information
Annals of Actuarial Science , Volume 9 , Issue 1 , March 2015 , pp. 58 - 71
Copyright
© Institute and Faculty of Actuaries 2014 

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