AIDA 181 - Chapters 1-10 Exam Questions and Answers Fully Solved Latest Update 2025-2026
Insurers can benefit from - Answers A framework they can use to approach problems through data
analysis
The important first step in a decision-making model is to - Answers Define the problem
Which one of the following is a way that insurers and risk managers can use data science to improve
their results through data-driven decision making? - Answers Discovering new relationships in data
The first step in the data mining process is to - Answers Understand what a business wants to achieve
Which one of the following correctly describes classification? - Answers Classification assigns members
of a dataset into categories based on known characteristics.
Which one of the following is a legal and regulatory concern in obtaining mass information from social
media? - Answers Privacy
Which one of the following correctly describes a new evolution of big data, sometimes referred to as big
data 2.0 in insurance and risk management? - Answers Organizations can strategically use data from the
Internet of Things and vehicle telematics.
A project team at Goshen Mutual has been working on developing a new product for the personal
insurance market. The team is using geodemographic data to determine which territories would be the
best to introduce the product. Geodemographic data would be categorized as - Answers Structured
external data
Galliano Insurance Agency knows that it is most likely to retain the customers that it insures for multiple
lines of coverage. The agency is always trying to identify new insurance products. To help identify new
products, it needs a data mining technique that will explore data to find groups with common and
previously unknown characteristics. Which one of the following data mining techniques should Galliano
Insurance Agency use? - Answers Cluster analysis
Reynolds Insurance provides workers compensation insurance for small to medium sized companies,
mostly to its local and regional manufacturers. For data science to be relevant and useful to Reynolds,
which one of the following types of technology would be its best investment? - Answers Harnessing the
Internet of Things data to analyze data from wearables such as hardhats and steel-toed boots.
Which one of the following is correct regarding an insurer's big data? - Answers An insurer's big data
consists of both its own internal data and external data.
Data scientists must be able to - Answers Analyze traditional data as well as new types.
Gustav is a claims representative from Forefront Insurance. He is accessing online weather reports to
determine hazardous road conditions alleged by an injured claimant. These weather reports are an
example of which one of the following types of data? - Answers External unstructured data
,The descriptive approach is applied - Answers When an insurer or risk manager has a specific problem.
Which one of the following is correct regarding data science teams in insurance and risk management
organizations? - Answers Risk management and insurance professionals can be valuable members of
data science teams.
Big data includes - Answers Both structured and unstructured data.
All of the following are fundamental concepts of data science, EXCEPT: - Answers The data mining
project need not provide actions that lead to better business results in order to be considered
worthwhile.
Which one of the following can be applied over time to refine a model to better predict results? -
Answers Machine Learning
Which one of the following is a data mining technique an insurer applies when it knows what
information it wants to predict? - Answers Classification
Which one of the following is correct about data science? - Answers Data science is a new field that
arose from the need to link big data and technology to provide useful information.
Durham Insurance insures many trucking operations and has a large database of loss experience. It
wants to know how many hours a driver can drive without taking a break before the likelihood of having
an accident increases. Which one of the following data mining techniques would an analyst use to
predict the number of hours? - Answers Regression analysis
Data science is especially useful for - Answers Unstructured data
Data scientists at Grisham Risk and Insurance are working with underwriting, claims, and other
department professionals to design data mining projects to help generate better business solutions and
decisions. Which one of the following is true regarding this collaboration at Grisham? - Answers The data
scientists will explore underutilized sources of data, such as social media and social networks.
The insurance professionals who have traditionally analyzed data and made predictions based on their
analyses are - Answers Actuaries
Greatview Insurance wants to predict which auto liability claims will most likely go to litigation, so it can
assign them to experienced adjusters early in the process. There are certain known indicators of
litigation that Greatview wants to use in the data mining process. Which one of the following data
mining techniques would Greatview's analyst most likely use? - Answers Classification
Which one of the following is a fundamental concept of data science? - Answers The selection of data
mining approaches must be considered in the context in which the results will be applied.
,Gabrielle is a claims representative from Onward Insurance. She is using external data to verify some
information as part of a claims investigation. In doing so, Gabrielle will likely rely on all of the following
sources of information, EXCEPT: - Answers The claimant's recorded statement given to Gabrielle
The purpose of data analytics for insurers is to - Answers Make data-driven decisions and strategy.
Which one of the following is a characteristic that differentiates big data from traditional data? -
Answers Velocity
Technology that can particularly assist adjusters in evaluating claims after catastrophes is - Answers
Drones
Tania works in the fraud unit for Greatview Insurance. There is a claimant who appears to be involved in
multiple cases of insurance fraud. Tania decides to use social media to obtain information that may be
used to develop a profile of the claimant. Tania's use of social media is an example of which one of the
following types of data? - Answers Unstructured external
Which one of the following is a data governance committee (DGC) responsibility? - Answers A data
governance committee ensures there are few conflicts or redundancies in data standards and practices.
To gain a competitive advantage, maintain profitability, and satisfy customers an organization must -
Answers Be able to trust its data.
Which one of the following is an example of a data governance tool? - Answers External policy
Sound risk management decisions are predicated on - Answers Quality data
Under the General Data Protection Regulation (GDPR), a data controller's role is to - Answers Define
how and for what purpose personal data should be processed.
The data quality principle of reasonability refers to - Answers The materiality or relevance of data.
Which one of the following defines individual risk? - Answers Individual risk varies according to the type
of business.
Which one of the following is a basic process in any data security program? - Answers Develop and
enforce stronger password protocols.
A privacy impact assessment (PIA) is - Answers A tool used to identify and assess privacy risks.
In terms of data quality principles, validity is defined as - Answers The accuracy of data within
predefined and accepted parameters or values.
There are two types of associated risk for data privacy, individual and general risk. General data privacy
risk - Answers Can be categorized operational or reputational.
The lifeblood of every organizational function is - Answers Data
, In terms of data governance, IT employees hold the role of - Answers Data custodians
Which one of the following is an element of a data security program? - Answers Storing data back-ups
off site.
Which one of the following functions of a data management program would allow accounting
transactions to automatically update an organization's financial statements? - Answers Data Integration
Wycliffe Insurance is very concerned about data quality and has many safeguards in place to ensure the
data it collects and stores is managed appropriately. New claims data is entered with the date of its
arrival to the department. Then the claims representative's activities are also entered with the date and
time whenever the file is updated. The organization has chosen this data formatting to reflect the
required degree of accuracy that has proven many times to be beneficial when the data is used in
settlement negotiations or arbitration hearings. The dimension of stored data quality used in this case
by Wycliffe is - Answers Precision
Internal data entry processes that capture accounting transactions, customer data or other operational
transactions are called - Answers Data capture
Which one of the following statements is correct regarding the personal data and privacy positions of
the European Union (EU) and the U.S.? - Answers The EU has one all-encompassing data protection
framework and the U.S. has several more targeted privacy laws.
Malware is defined as - Answers Software designed to cause damage.
Which one of the following is true regarding data quality? - Answers Data quality is a relative, not an
absolute, concept.
Data governance provides - Answers Definitions, standards and procedures for how data is used
Which one of the following is the term for the most similar instances in a data model? - Answers Nearest
Neighbors
In a social networking scenario, which one of the following counts how many people are connected to a
person? - Answers Degree
Conducting unsupervised learning before supervised learning may - Answers Provide the information
needed to define an appropriate target for supervised learning.
Provide the information needed to define an appropriate target for supervised learning. - Answers
Correctly predicts a positive.
In predictive modeling terminology, a target variable is - Answers The predefined attribute whose value
is being predicted in a predictive model.
Which one of the following best describes why a weighted average gives a more accurate estimate than
a simple majority combining function when predicting the value of a target variable by its nearest
Insurers can benefit from - Answers A framework they can use to approach problems through data
analysis
The important first step in a decision-making model is to - Answers Define the problem
Which one of the following is a way that insurers and risk managers can use data science to improve
their results through data-driven decision making? - Answers Discovering new relationships in data
The first step in the data mining process is to - Answers Understand what a business wants to achieve
Which one of the following correctly describes classification? - Answers Classification assigns members
of a dataset into categories based on known characteristics.
Which one of the following is a legal and regulatory concern in obtaining mass information from social
media? - Answers Privacy
Which one of the following correctly describes a new evolution of big data, sometimes referred to as big
data 2.0 in insurance and risk management? - Answers Organizations can strategically use data from the
Internet of Things and vehicle telematics.
A project team at Goshen Mutual has been working on developing a new product for the personal
insurance market. The team is using geodemographic data to determine which territories would be the
best to introduce the product. Geodemographic data would be categorized as - Answers Structured
external data
Galliano Insurance Agency knows that it is most likely to retain the customers that it insures for multiple
lines of coverage. The agency is always trying to identify new insurance products. To help identify new
products, it needs a data mining technique that will explore data to find groups with common and
previously unknown characteristics. Which one of the following data mining techniques should Galliano
Insurance Agency use? - Answers Cluster analysis
Reynolds Insurance provides workers compensation insurance for small to medium sized companies,
mostly to its local and regional manufacturers. For data science to be relevant and useful to Reynolds,
which one of the following types of technology would be its best investment? - Answers Harnessing the
Internet of Things data to analyze data from wearables such as hardhats and steel-toed boots.
Which one of the following is correct regarding an insurer's big data? - Answers An insurer's big data
consists of both its own internal data and external data.
Data scientists must be able to - Answers Analyze traditional data as well as new types.
Gustav is a claims representative from Forefront Insurance. He is accessing online weather reports to
determine hazardous road conditions alleged by an injured claimant. These weather reports are an
example of which one of the following types of data? - Answers External unstructured data
,The descriptive approach is applied - Answers When an insurer or risk manager has a specific problem.
Which one of the following is correct regarding data science teams in insurance and risk management
organizations? - Answers Risk management and insurance professionals can be valuable members of
data science teams.
Big data includes - Answers Both structured and unstructured data.
All of the following are fundamental concepts of data science, EXCEPT: - Answers The data mining
project need not provide actions that lead to better business results in order to be considered
worthwhile.
Which one of the following can be applied over time to refine a model to better predict results? -
Answers Machine Learning
Which one of the following is a data mining technique an insurer applies when it knows what
information it wants to predict? - Answers Classification
Which one of the following is correct about data science? - Answers Data science is a new field that
arose from the need to link big data and technology to provide useful information.
Durham Insurance insures many trucking operations and has a large database of loss experience. It
wants to know how many hours a driver can drive without taking a break before the likelihood of having
an accident increases. Which one of the following data mining techniques would an analyst use to
predict the number of hours? - Answers Regression analysis
Data science is especially useful for - Answers Unstructured data
Data scientists at Grisham Risk and Insurance are working with underwriting, claims, and other
department professionals to design data mining projects to help generate better business solutions and
decisions. Which one of the following is true regarding this collaboration at Grisham? - Answers The data
scientists will explore underutilized sources of data, such as social media and social networks.
The insurance professionals who have traditionally analyzed data and made predictions based on their
analyses are - Answers Actuaries
Greatview Insurance wants to predict which auto liability claims will most likely go to litigation, so it can
assign them to experienced adjusters early in the process. There are certain known indicators of
litigation that Greatview wants to use in the data mining process. Which one of the following data
mining techniques would Greatview's analyst most likely use? - Answers Classification
Which one of the following is a fundamental concept of data science? - Answers The selection of data
mining approaches must be considered in the context in which the results will be applied.
,Gabrielle is a claims representative from Onward Insurance. She is using external data to verify some
information as part of a claims investigation. In doing so, Gabrielle will likely rely on all of the following
sources of information, EXCEPT: - Answers The claimant's recorded statement given to Gabrielle
The purpose of data analytics for insurers is to - Answers Make data-driven decisions and strategy.
Which one of the following is a characteristic that differentiates big data from traditional data? -
Answers Velocity
Technology that can particularly assist adjusters in evaluating claims after catastrophes is - Answers
Drones
Tania works in the fraud unit for Greatview Insurance. There is a claimant who appears to be involved in
multiple cases of insurance fraud. Tania decides to use social media to obtain information that may be
used to develop a profile of the claimant. Tania's use of social media is an example of which one of the
following types of data? - Answers Unstructured external
Which one of the following is a data governance committee (DGC) responsibility? - Answers A data
governance committee ensures there are few conflicts or redundancies in data standards and practices.
To gain a competitive advantage, maintain profitability, and satisfy customers an organization must -
Answers Be able to trust its data.
Which one of the following is an example of a data governance tool? - Answers External policy
Sound risk management decisions are predicated on - Answers Quality data
Under the General Data Protection Regulation (GDPR), a data controller's role is to - Answers Define
how and for what purpose personal data should be processed.
The data quality principle of reasonability refers to - Answers The materiality or relevance of data.
Which one of the following defines individual risk? - Answers Individual risk varies according to the type
of business.
Which one of the following is a basic process in any data security program? - Answers Develop and
enforce stronger password protocols.
A privacy impact assessment (PIA) is - Answers A tool used to identify and assess privacy risks.
In terms of data quality principles, validity is defined as - Answers The accuracy of data within
predefined and accepted parameters or values.
There are two types of associated risk for data privacy, individual and general risk. General data privacy
risk - Answers Can be categorized operational or reputational.
The lifeblood of every organizational function is - Answers Data
, In terms of data governance, IT employees hold the role of - Answers Data custodians
Which one of the following is an element of a data security program? - Answers Storing data back-ups
off site.
Which one of the following functions of a data management program would allow accounting
transactions to automatically update an organization's financial statements? - Answers Data Integration
Wycliffe Insurance is very concerned about data quality and has many safeguards in place to ensure the
data it collects and stores is managed appropriately. New claims data is entered with the date of its
arrival to the department. Then the claims representative's activities are also entered with the date and
time whenever the file is updated. The organization has chosen this data formatting to reflect the
required degree of accuracy that has proven many times to be beneficial when the data is used in
settlement negotiations or arbitration hearings. The dimension of stored data quality used in this case
by Wycliffe is - Answers Precision
Internal data entry processes that capture accounting transactions, customer data or other operational
transactions are called - Answers Data capture
Which one of the following statements is correct regarding the personal data and privacy positions of
the European Union (EU) and the U.S.? - Answers The EU has one all-encompassing data protection
framework and the U.S. has several more targeted privacy laws.
Malware is defined as - Answers Software designed to cause damage.
Which one of the following is true regarding data quality? - Answers Data quality is a relative, not an
absolute, concept.
Data governance provides - Answers Definitions, standards and procedures for how data is used
Which one of the following is the term for the most similar instances in a data model? - Answers Nearest
Neighbors
In a social networking scenario, which one of the following counts how many people are connected to a
person? - Answers Degree
Conducting unsupervised learning before supervised learning may - Answers Provide the information
needed to define an appropriate target for supervised learning.
Provide the information needed to define an appropriate target for supervised learning. - Answers
Correctly predicts a positive.
In predictive modeling terminology, a target variable is - Answers The predefined attribute whose value
is being predicted in a predictive model.
Which one of the following best describes why a weighted average gives a more accurate estimate than
a simple majority combining function when predicting the value of a target variable by its nearest
