Improving Business Insurance Loss Models by Leveraging InsurTech Innovation

Fuente: arXiv
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Autori principali: Quan, Zhiyu, Hu, Changyue, Dong, Panyi, Valdez, Emiliano A.
Natura: Preprint
Pubblicazione: 2024
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author Quan, Zhiyu
Hu, Changyue
Dong, Panyi
Valdez, Emiliano A.
author_facet Quan, Zhiyu
Hu, Changyue
Dong, Panyi
Valdez, Emiliano A.
contents Recent transformative and disruptive advancements in the insurance industry have embraced various InsurTech innovations. In particular, with the rapid progress in data science and computational capabilities, InsurTech is able to integrate a multitude of emerging data sources, shedding light on opportunities to enhance risk classification and claims management. This paper presents a groundbreaking effort as we combine real-life proprietary insurance claims information together with InsurTech data to enhance the loss model, a fundamental component of insurance companies' risk management. Our study further utilizes various machine learning techniques to quantify the predictive improvement of the InsurTech-enhanced loss model over that of the insurance in-house. The quantification process provides a deeper understanding of the value of the InsurTech innovation and advocates potential risk factors that are unexplored in traditional insurance loss modeling. This study represents a successful undertaking of an academic-industry collaboration, suggesting an inspiring path for future partnerships between industry and academic institutions.
format Preprint
id arxiv_https___arxiv_org_abs_2401_16723
institution arXiv
publishDate 2024
record_format arxiv
spellingShingle Improving Business Insurance Loss Models by Leveraging InsurTech Innovation
Quan, Zhiyu
Hu, Changyue
Dong, Panyi
Valdez, Emiliano A.
Risk Management
Recent transformative and disruptive advancements in the insurance industry have embraced various InsurTech innovations. In particular, with the rapid progress in data science and computational capabilities, InsurTech is able to integrate a multitude of emerging data sources, shedding light on opportunities to enhance risk classification and claims management. This paper presents a groundbreaking effort as we combine real-life proprietary insurance claims information together with InsurTech data to enhance the loss model, a fundamental component of insurance companies' risk management. Our study further utilizes various machine learning techniques to quantify the predictive improvement of the InsurTech-enhanced loss model over that of the insurance in-house. The quantification process provides a deeper understanding of the value of the InsurTech innovation and advocates potential risk factors that are unexplored in traditional insurance loss modeling. This study represents a successful undertaking of an academic-industry collaboration, suggesting an inspiring path for future partnerships between industry and academic institutions.
title Improving Business Insurance Loss Models by Leveraging InsurTech Innovation
topic Risk Management
url https://arxiv.org/abs/2401.16723