Risk modelling is at the very heart of insurance. Risk modelling is done generally with tools that use GLM (Generalized Linear Model). Improving the model results is rather difficult, because it is hard to come up with new variables, or combination of variables with the current tools that are available in the market that use GLM. Next to that, there is also a need for audit traceable automated reports for the modelling process, which is being prepared manually at the moment.
But, it is also possible to develop other algorithms and processes using Artificial Intelligence and Machine Learning techniques that yield much more accurate results. Lumnion, together with HDI Sigorta, have developed Cheetah, a Risk Modelling tool for the insurance industry. Cheetah allows sophisticated pricing and risk decisions in a simple and user-friendly environment through its easy-to-use and intuitive user interface. The solution is able to use different dynamic modelling techniques, that include AI and ML algorithms such as GBMs, Random Forest, Decision Trees and various other widely used methods in a transparent way.
The tool can also be integrated into the core insurance systems, allowing it to work online.The state of the art interactive reporting module supports the business in monitoring expected results and strategic analyses. Cheetah matches the sophistication demanded from the end user, and even provides assistance, without ever sacrificing the simplicity in its design. And with this, the tool has already proven its impact at several insurers.
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