Faculty Advisor or Committee Member
Joseph D. Petruccelli, Advisor
A key challenge for the insurance industry is to charge each customer an appropriate price for the risk they represent. Risk varies widely from customer to customer, and a deep understanding of different risk factors helps predict the likelihood and cost of insurance claims. The goal of this project is to see how well various statistical methods perform in predicting bodily injury liability Insurance claim payments based on the characteristics of the insured customerâ€™s vehicles for this particular dataset from Allstate Insurance Company.We tried several statistical methods, including logistic regression, Tweedieâ€™s compound gamma-Poisson model, principal component analysis (PCA), response averaging, and regression and decision trees. From all the models we tried, PCA combined with a with a Regression Tree produced the best results. This is somewhat surprising given the widespread use of the Tweedie model for insurance claim prediction problems.
Worcester Polytechnic Institute
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Huangfu, Dan, "Data Mining for Car Insurance Claims Prediction" (2015). Masters Theses (All Theses, All Years). 383.
data mining, statistical methods, prediction, gini