Sampling Insurance Claims to Determine Damages


A major manufacturer made product liability insurance claims covering millions of dollars in health claims arising from the use of its products. After the insurer disputed the claims, an accountant hired by the manufacturer drew a sample from tens of thousands of claims. Several nationally recognized statisticians identified a deficient sample draw, as well as errors in the estimates made from it.


We reviewed the sample drawn by the accountant, and the criticisms leveled at it by the statisticians.


Apparently the statisticians did not have the full picture. However, Analysis & Inference established that the criticisms were more smoke than fire. What offended professional sensibilities made little difference in the final estimates. The sample was admitted.