GBMs and How to Use Them in P&C Insurance

2024 Webinar - GBMs and How to Use Them in P&C Insurance  - August 29

GBMs present a significant opportunity for improved predictive power over GLMs. However, insurance practitioners know they need to balance other priorities, such as transparency and stability – areas that can be weaknesses for GBMs. After a brief introduction to GBMs, we will discuss specific issues related to their use for insurance applications. We will then demonstrate different approaches to address these issues, focusing on answering questions such as:

• For what types of problems does it make sense to use GBMs instead of GLMs?
• How can I understand the predictions a GBM makes?
• How can I ensure my GBM is sufficiently stable?

With this foundation in mind, we will take a look at how GBMs are currently being used in US P&C insurance and how that compares to differently regulated markets, such as the UK.

Learning Objectives:

1. Understand at a high level how GBMs work and compare them to GLMs.
2. Recognize issues associated with using GBMs for some insurance problems.
3. Assess different ways in which these issues are being addressed.

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