As with other industries, the actuarial profession is also incorporating machine learning ideas, directly and indirectly, as well as exploring areas where these tools can be integrated.
Below are examples of areas which machine learning could be used.
Examples - Machine Learning
- Creating a predictive model
For example, we can use machine learning techniques to “train” and “automate” a model for prediction, which could reduce time in set-up if there was a large number of data points in question compared to more traditional or manual techniques.
- Creating a set of assumptions
For example, we can use machine learning techniques to come up with a suggested trend or best estimate for investment return over a period.
Examples - Unsupervised Learning
- Fraud Detection
Machine learning could be used to detect outliers for claims and hence detect fraudulent claims.
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