Ted Rogers School of Management Researcher Has Published New Study Findings on Risk Management (Estimating Territory Risk Relativity Using Generalized Linear Mixed Models and Fuzzy C-Means Clustering): Insurance – Risk Management

2023 JUN 09 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Data detailed on risk management have been presented. According to news reporting originating from Toronto, Canada, by NewsRx correspondents, research stated, “Territory risk analysis has played an important role in auto insurance rate regulation.”

Our news journalists obtained a quote from the research from Ted Rogers School of Management: “It aims to design rating territories from a set of basic rating units so that their respective risk relativities can be estimated to reflect the regional risk of insurance. In this work, spatially constrained clustering is first applied to insurance loss data to form such regions, using the forward sortation area (FSA) as a basic rating unit. The groupings of FSA by spatially constrained clustering reduce the insurance rate heterogeneity caused by smaller risk exposures. Furthermore, the generalized linear mixed model (GLMM) is proposed to derive the risk relativities of clusters and each FSA. In addition, as an alternative approach, fuzzy C-Means clustering is proposed to derive the risk relativity of FSA, and the obtained results are compared to the ones from GLMM.”

According to the news reporters, the research concluded: “The spatially constrained clustering and risk relativity estimation help to retrieve a set of territory risk benchmarks used in rate filings within the regulation process. It also provides guidance for auto insurance companies on rate making.”

For more information on this research see: Estimating Territory Risk Relativity Using Generalized Linear Mixed Models and Fuzzy C-Means Clustering. Risks, 2023,11(6). (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks11060099.

Our news editors report that additional information may be obtained by contacting Shengkun Xie, Global Management Studies, Ted Rogers School of Management, Toronto Metropolitan University, Toronto, ON M5B 2K3, Canada. Additional authors for this research include Chong Gan.

ORCID is an identifier for authors and includes bibliographic information. The following is ORCID information for the author of this research: Shengkun Xie (http://orcid.org/0000-0002-9533-2096).

(Our reports deliver fact-based news of research and discoveries from around the world.)