Watch Your Statistics!

An incident of the casualty insurance business has been the production of a large volume of statistical data which governs almost every action we take. In fact, some critics assert that we casualty men are in grave danger of substituting statistics for common sense and personal judgment in the conduct of our affairs. The construction of basic manual rates; the application to individual risks of experience, equity and retrospective rating ; the testing of rates and rate levels for adequacy and reasonableness; the determination of the necessity for, the points of attack and the efficiency of preventive measures; the appraisal of the success or failure of the underwriting policies of an insurance carrier in a territory, in an agency, in an individual underwriting department or during a certain period of time; the compilation of assets and liabilities for financial statements; these and many other operations require the use of statistical information laboriously tabulated in minute detail. Statistics unquestionably have become an indispensable factor in our daily business life.