Machine Learning Techniques for Variable Annuity Valuation

Guojun Gan, Zhiyu Quan, Emiliano Valdez

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Machine learning refers to a broad class of computational methods that use experience to improve performance or to make accurate predictions. There are two broad categories of machine learning tasks: supervised learning and unsupervised learning. Supervised learning tasks involve labeled data, which consist of inputs and their desired outputs. Unsupervised learning tasks involve unlabeled data, which consist of only inputs. In this paper, we give a brief overview of some machine learning techniques and demonstrate their applications in insurance. In particular, we apply data clustering and tree-based models to address a computational problem arising from the valuation of variable annuity products. Our numerical results show that tree-based models are able to produce accurate predictions and reduce the computational time significantly.

Original languageEnglish (US)
Title of host publication4th International Conference on Big Data and Information Analytics
Subtitle of host publicationTheories, Algorithms and Applications in Data Science, BigDIA 2018
PublisherInstitute of Electrical and Electronics Engineers Inc.
ISBN (Electronic)9781538668887
DOIs
StatePublished - Jan 31 2019
Externally publishedYes
Event4th International Conference on Big Data and Information Analytics, BigDIA 2018 - Houston, United States
Duration: Dec 17 2018Dec 19 2018

Publication series

Name4th International Conference on Big Data and Information Analytics: Theories, Algorithms and Applications in Data Science, BigDIA 2018

Conference

Conference4th International Conference on Big Data and Information Analytics, BigDIA 2018
Country/TerritoryUnited States
CityHouston
Period12/17/1812/19/18

Keywords

  • data clustering
  • portfolio valuation
  • regression tree
  • variable annuity

ASJC Scopus subject areas

  • Hardware and Architecture
  • Signal Processing
  • Information Systems and Management
  • Computer Networks and Communications
  • Safety, Risk, Reliability and Quality

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