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As a manager at a major insurance company, Meredith asks two of her analysts to help answer two separate questions regarding a recent car insurance client. She asks the first analyst, Darryl, to predict the likelihood that the client will be in an accident in the next five years using demographic characteristics (e.g., the client's age, education, etc.). She asks the second analyst, Amanda, to predict the effect of a 10% cut in the client's premium on the likelihood that the client switches providers in the next three years. Which analyst is making an active prediction? Why?

The amount you'll pay for car insurance is impacted by a number of very different factorsfrom the type of coverage you have to your driving record to where you park your car. While not all companies use the same parameters. In the above case Amanda is making an active prediction, because these days there are many competitors in the market for each product or service. The first analysis Darryl is predicting the likelihood that the client will be in an accident in the next five years using demographics, the probability of this analysis may not occur. As per market so many company's and agency's are providing insurance so the client will switch over to others based on their interest and convenience.

For example Jordan bought a car and completed all the paperwork necessary for registration and he took the insurance policy from the company. The policy was active for one year and after that he can renew through the same company or some other agencies. Because there are many competitors in the market we have to maintain customer relationships as much as possible for the business to survive.

In the first analysis the probability of likelihood that the client will be in an accident in the next five years if that may occur or not...or if they will continue to be with us.

It seems the second analysis would provide a better benefit to the client while not affecting them financially.

https://www.iii.org/article/what-determines-price-my-auto-insurance-policy