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Insurance pricing is the process of determining the premiums that policyholders pay in exchange for insurance coverage. In order to estimate premiums, actuaries use statistical based methods, assessing various factors such as the probability of certain events occurring (like accidents or damages), where the Generalized Linear Models (GLMs) are the industry standard method. Traditional GLM approaches face limitations due to non-differentiable loss functions and expansive variable spaces, including both main and interaction terms. In this study, we address the challenge of selecting relevant variables for GLMs used in non-life insurance pricing both for frequency or severity analyses, amidst an increasing volume of data and variables. We propose a novel application of the Genetic Algorithm (GA) to efficiently identify pertinent main and interaction effects in GLMs, even in scenarios with a high variable count and diverse loss functions. Our approach uniquely aligns GLM predictions with those of black box machine learning models, enhancing their interpretability and reliability. Using a publicly available non-life motor data set, we demonstrate the GA's effectiveness by comparing its selected GLM with a Gradient Boosted Machine (GBM) model. The results show a strong consistency between the main and interaction terms identified by GA for the GLM and those revealed in the GBM analysis, highlighting the potential of our method to refine and improve pricing models in the insurance sector. [ABSTRACT FROM AUTHOR]

Over the past few years, the scale of sensor networks has greatly expanded. This generates extended spatiotemporal datasets, which form a crucial information resource in numerous fields, ranging from sports and healthcare to environmental science and surveillance. Unfortunately, these datasets often contain missing values due to systematic or inadvertent sensor misoperation. This incompleteness hampers the subsequent data analysis, yet addressing these missing observations forms a challenging problem. This is especially the case when both the temporal correlation of timestamps within a single sensor and the spatial correlation between sensors are important. Here, we apply and evaluate 12 imputation methods to complete the missing values in a dataset originating from large-scale environmental monitoring. As part of a large citizen science project, IoT-based microclimate sensors were deployed for six months in 4400 gardens across the region of Flanders, generating 15-min recordings of temperature and soil moisture. Methods based on spatial recovery as well as time-based imputation were evaluated, including Spline Interpolation, MissForest, MICE, MCMC, M-RNN, BRITS, and others. The performance of these imputation methods was evaluated for different proportions of missing data (ranging from 10% to 50%), as well as a realistic missing value scenario. Techniques leveraging the spatial features of the data tend to outperform the time-based methods, with matrix completion techniques providing the best performance. Our results therefore provide a tool to maximize the benefit from costly, large-scale environmental monitoring efforts. [ABSTRACT FROM AUTHOR]

Within the broader context of improving interactions between artificial intelligence and humans, the question has arisen regarding whether auditory and rhythmic support could increase attention for visual stimuli that do not stand out clearly from an information stream. To this end, we designed an experiment inspired by pip-and-pop but more appropriate for eliciting attention and P3a-event-related potentials (ERPs). In this study, the aim was to distinguish between targets and distractors based on the subject's electroencephalography (EEG) data. We achieved this objective by employing different machine learning (ML) methods for both individual-subject (IS) and cross-subject (CS) models. Finally, we investigated which EEG channels and time points were used by the model to make its predictions using saliency maps. We were able to successfully perform the aforementioned classification task for both the IS and CS scenarios, reaching classification accuracies up to 76%. In accordance with the literature, the model primarily used the parietal–occipital electrodes between 200 ms and 300 ms after the stimulus to make its prediction. The findings from this research contribute to the development of more effective P300-based brain–computer interfaces. Furthermore, they validate the EEG data collected in our experiment. [ABSTRACT FROM AUTHOR]

The concordance probability, also called the C-index, is a popular measure to capture the discriminatory ability of a predictive model. In this article, the definition of this measure is adapted to the specific needs of the frequency and severity model, typically used during the technical pricing of a non-life insurance product. For the frequency model, the need of two different groups is tackled by defining three new types of the concordance probability. Secondly, these adapted definitions deal with the concept of exposure, which is the duration of a policy or insurance contract. Frequency data typically have a large sample size and therefore we present two fast and accurate estimation procedures for big data. Their good performance is illustrated on two real-life datasets. Upon these examples, we also estimate the concordance probability developed for severity models. [ABSTRACT FROM AUTHOR]

In this work, a method is proposed for exploiting the predictive power of a geo-tagged dataset as a means of identification of user-relevant points of interest (POI). The proposed methodology is subsequently applied in an insurance context for the automatic identification of a driver's residence address, solely based on his pattern of movements on the map. The analysis is performed on a real-life telematics dataset. We have anonymized the considered dataset for the purpose of this study to respect privacy regulations. The model performance is evaluated based on an independent batch of the dataset for which the address is known to be correct. The model is capable of predicting the residence postal code of the user with a high level of accuracy, with an f1 score of 0.83. A reliable result of the proposed method could generate benefits beyond the area of fraud, such as general data quality inspections, one-click quotations, and better-targeted marketing. [ABSTRACT FROM AUTHOR]

The chain ladder method is a popular technique to estimate the future reserves needed to handle claims that are not fully settled. Since the predictions of the aggregate portfolio (consisting of different subportfolios) do not need to be equal to the sum of the predictions of the subportfolios, a general multivariate chain ladder (GMCL) method has already been proposed. However, the GMCL method is based on the seemingly unrelated regression (SUR) technique which makes it very sensitive to outliers. To address this issue, we propose a robust alternative that estimates the SUR parameters in a more outlier resistant way. With the robust methodology it is possible to automatically flag the claims with a significantly large influence on the reserve estimates. We introduce a simulation design to generate artificial multivariate run-off triangles based on the GMCL model and illustrate the importance of taking into account contemporaneous correlations and structural connections between the run-off triangles. By adding contamination to these artificial datasets, the sensitivity of the traditional GMCL method and the good performance of the robust GMCL method is shown. From the analysis of a portfolio from practice it is clear that the robust GMCL method can provide better insight in the structure of the data. [ABSTRACT FROM AUTHOR]