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Question 140 - CBDA discussion

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Freedom Insurance is planning to offer a new type of insurance policy and would like to determine how to optimally price it. The company seeks to identify the characteristics of this policy that would produce the maximum profit in the coming year. What type of analytics would Freedom Insurance be considering to achieve this objective?

A.
Retrospective analytics
Answers
A.
Retrospective analytics
B.
Descriptive analytics
Answers
B.
Descriptive analytics
C.
Predictive analytics
Answers
C.
Predictive analytics
D.
Prescriptive analytics
Answers
D.
Prescriptive analytics
Suggested answer: D

Explanation:

Explanation: According to the Guide to Business Data Analytics, prescriptive analytics is a type of analytics that provides recommendations or suggestions for optimal actions or decisions based on data analysis. Prescriptive analytics uses techniques such as optimization, simulation, and decision analysis to evaluate various scenarios and trade-offs and to determine the best course of action for a given objective and constraint. Prescriptive analytics can help organizations achieve their goals, improve their performance, and increase their efficiency and effectiveness. In this situation, Freedom Insurance wants to determine how to optimally price a new type of insurance policy that would produce the maximum profit in the coming year. This is a prescriptive analytics problem, as it involves finding the optimal solution for a complex and uncertain decision problem.

asked 18/09/2024
Venkata Shiva Rajesh Boyinapalli
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