Problem Definition:
The Problem in this case is to compare the data provided by Lame Insurance Agency and with data representing the state-wide insurance claims within Kentucky. In addition, we want to know the demographics specific to Lame Insurance Agency and which characteristics make up their individual profile.
Research Questions:
Are the claims that are reported to Lame Insurance Agency comparable to the statewide average in Kentucky?
What are the profile characteristics within Carr Insurance Agency?
- Is the average cost of claims the same for all age groups of the Insurance holders?
- Is the average cost of claims the same for all ages of the insurance holders’ cars?
- Is the average cost of claims the same for all vehicle groups (A,B,C,D)?
Conclusion and Recommendation:
In conclusion, Lame Insurance Agency’s average cost of collision claims are comparable to the state-wide average. However, it should be noted that the mean for Ms. Carr’s clients was slightly lower than Kentucky’s mean, but the difference proved not to be statistically significant. The mean for the state of Kentucky was $252 and the mean for Ms. Carr’s clients was approximately $231.
Concerning the demographics of profile of Carr Insurance Agency, some variables such as age of the car and vehicle group proved to be statistically significant. One notable conclusion I found while running the test is that the cost of the claim significantly decreases as the age of the car increases. For example, for vehicles between 0-3 years old the average cost of the claim was $304.69; between 4-7 years old the average claim decreases to $273.72; between 8-9 years old the average again drops to $191.23; lastly, for vehicles 10 years and older the average claim was the lowest, $142.61.
Additionally, there were similar significant differences within the vehicle groups. Vehicle group A had the