Problem-Solving and Critical Thinking Skills
What this domain tests
This domain tests structured reasoning under uncertainty: framing a question, generating competing hypotheses, and choosing the explanation that survives the evidence. Expect scenario items where one plausible story is offered and a duller explanation is correct.
Core rules
- Frame the question as a decision: what action changes depending on the answer?
- Use analysis of competing hypotheses: list at least three explanations, then score each on evidence for, evidence against, and diagnostic value.
- Falsify rather than confirm. Ask what data would prove the hypothesis wrong, then look for it.
- Respect base rates: a rare event stays rare even after a positive indicator.
- Separate correlation from cause; control for volume, seasonality, coding changes, and mix.
- Watch for anchoring, confirmation bias, availability, survivorship, and regression to the mean.
Worked example
Water-damage claims in one region rose 40% in Q3. Hypotheses: (1) a weather event; (2) one adjuster re-coded "mold" as "water damage"; (3) policy count grew; (4) a restoration vendor is steering claims. Reasoning: pull an independent weather source for the region and quarter - a severe storm explains much of it; then check whether other peril codes fell for the same adjuster, which would indicate recoding rather than new loss; then recompute per 1,000 policy-years to remove growth; only then measure vendor concentration. The rate check and the coding check come before any fraud hypothesis, because both are cheaper explanations that must be eliminated first.
Traps that cost marks
- Reporting a count increase when exposure also increased.
- Jumping to fraud before eliminating weather, coding, and mix effects.
- Building a case on one vivid example instead of the distribution.
- Listing a single hypothesis and gathering only supporting evidence.