Machine Learning and Insurance Claim Forecasts

This article provides an introduction to forecasting insurance claims payouts. We focus specifically on the claims arising from weather events (events) that result in large scale destruction such as hurricanes, wildfires, floods, etc. We first provide a general overview of the traditional methodology and then discuss potential use of machine learning (ML) techniques to enhance the forecasting process. While the examples and website references provided in this article are US-centric, the ideas presented herein are general and can be applied to all locations. In other regions and countries, the analyst will need to substitute the appropriate data sources for event data.