Media Automatic Segmentation of Insurance Rating Classes via Group Fused Lasso

Automatic Segmentation of Insurance Rating Classes via Group Fused Lasso

uploaded May 3, 2024 Views: 39 Comments: 0 Favorite: 1 CPD
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This study proposes an enhanced sparse regularization technique for insurance ratemaking, focusing on automatic segmentation of rating classes. It introduces a group fused lasso regularization to group insurance rating factors into fewer categories, ensuring accurate and simple tariff referencing. The approach is demonstrated using motorcycle insurance data, showing effective grouping of adjacent categories into homogeneous clusters for expected claim frequency and severity.

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