MQP 2009-Analyzing Trends in Loss Frequency and Severity

Hanover Insurance evaluates historical data to analyze trends in loss frequency and severity of claims. The trends are caused by external factors, such as legislative, environmental and economic forces. Trends were analyzed using two different approaches, one correlating the trends from prior data to external factors, and another comparing the impact of events to trends in the data. The analysis mathematically quantified the effect of each external force and isolated factors which were most significant to the trends.