Question

If a claim analyst of an insurer enters a dollar amount for a claim reserve based on a set standard before research is done on the claim, this is an example of a ____________.

Answer 1

The situation described in the question is an example of anchoring bias. Anchoring bias is a cognitive bias where individuals rely too heavily on the initial information presented to them when making decisions or estimates. In this case, the claim analyst is basing the reserve amount on a set standard before conducting any research on the claim.

Step-by-step explanation:

The situation described in the question is an example of anchoring bias.

Anchoring bias is a cognitive bias where individuals rely too heavily on the initial information presented to them when making decisions or estimates. In this case, the claim analyst is basing the reserve amount on a set standard before conducting any research on the claim. This can lead to an inaccurate estimation of the actual value of the claim.

To mitigate the influence of anchoring bias, it is important for claim analysts to conduct thorough research and consider all relevant factors before determining the appropriate claim reserve amount.