Abstract
We construct a recommendation system for car insurance, to allow agents to optimize up-selling performances, by selecting customers who are most likely to subscribe an additional cover. The originality of our recommendation system is to be suited for the insurance context. While traditional recommendation systems, designed for online platforms (e.g. e-commerce, videos), are constructed on huge datasets and aim to suggest the next best offer, insurance products have specific properties which imply that we must adopt a different approach. Our recommendation system combines the XGBoost algorithm and the Apriori algorithm to choose which customer should be recommended and which cover to recommend, respectively. It has been tested in a pilot phase of around 150 recommendations, which shows that the approach outperforms standard results for similar up-selling campaigns.
Similar content being viewed by others
Notes
Foyer Assurances is leader of individual and professional insurance in Luxembourg.
References
Agrawal R, Srikant R (1994) Fast algorithms for mining association rules. In: Proceedings of the 20th international conference on very large data bases, VLDB '94 (September 1994), pp 487–499
Breese JS, Heckerman D, Kadie CM (2013) Empirical analysis of predictive algorithms for collaborative filtering. In: Proceedings of the fourteenth annual conference on uncertainty in artificial intelligence, pp 43–52 (1998)
Breiman L (2001) Random forests. Mach Learn 45(5–32):2001
Cremonesi P, Koren Y, Turrin R (2010) Performance of recommender algorithms on Top-N recommendation tasks. In: Proceedings of the ACM conference on recommender systems, RecSys 2010, Barcelona, Spain, 26–30 September 2010, pp 39–46
Friedman (1999) Greedy function approximation: a gradient boosting machine. Ann Stat 29(5):1189–1232
Gomez-Uribe CA, Hunt N (2015) The Netflix recommender system: algorithms, business value, and innovation. ACM Trans Manag Inf Syst 6:13:1–13:19
Kanter JM, Veeramachaneni K (2015) Deep feature synthesis: towards automating data science endeavors. In: 2015 IEEE international conference on data science and advanced analytics (DSAA)
Loh W-Y (2011) Classification and regression trees, WIREs Data Mining and Knowledge Discovery
Lundberg SM, Lee S-I (2017) A unified approach to interpreting model predictions. In: Advances in neural information processing systems, 30 (NIPS 2017)
Qazi M, Fung G, Meissner KJ, Fontes ER (2017) An insurance recommendation system using Bayesian networks. In: Proceedings of the Eleventh ACM conference on recommender systems, August 2017, pp 274–278
Ramos J (2003) Using TF-IDF to determine word relevance in document queries
Rokach L, Shani G, Shapira B, Chapnik E, Siboni G (2013) Recommending insurance riders. ACM SAC
Sarwar B, Karypis G, Konstan J, Riedl J (2001) Item-based collaborative filtering recommendation algorithms. In: Proceedings of the 10th international conference on World Wide Web. pp 285–295
Tummapudi TK, Uma M (2015) Effective navigation of query results using apriori algorithm. Int J Comput Sci Inf Technol 6(2):1952–1955
Zhang S, Yao L, Sun A, Tay Y (2018) Deep learning based recommender system: a survey and new perspectives. ACM Comput Surv 1(1):35
Zhao Z-D, Shang M-S (2010) User-based collaborative-filtering recommendation algorithms on Hadoop. In: 2010 third international conference on knowledge discovery and data mining, pp 478–481
Zibriczky D (2016) Recommender systems meet finance: a literature review. FINREC, New York
Acknowledgements
We developed this work in a strong collaboration with Foyer Assurances, Luxembourg, which provided the domain specific knowledge and use cases. We would like to thank the anonymous reviewers for the helpful remarks and advice that helped us improve the paper. We also gratefully acknowledge the funding received towards our project (number 13659700) from the Luxembourgish National Research Fund (FNR).
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Lesage, L., Deaconu, M., Lejay, A. et al. A recommendation system for car insurance. Eur. Actuar. J. 10, 377–398 (2020). https://doi.org/10.1007/s13385-020-00236-z
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s13385-020-00236-z