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IAI Actuarial Core Principles · Risk Modelling and Survival Analysis · Elementary principles of machine learning

An insurer has a dataset of past motor policies, each labelled with whether a claim was made, and wants a model to predict claims for new policies. Which type of machine learning does this describe?

This is supervised learning. The historical policies come with known outcome labels, claim or no claim, and the model learns the link between policy features and that label so it can predict outcomes for new policies. Unsupervised methods work without labelled outcomes.

  1. ASupervised learningCorrect
  2. BUnsupervised learning
  3. CReinforcement learning
  4. DClustering
  5. Dimension reduction

Explanation

The data contain a known target (claim or no claim) for each record, and the aim is to predict that target for new cases. This is supervised learning, specifically classification. Unsupervised methods have no labelled outcome.

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