Polimi Fintech Series – Michele Azzone – January 18, 2021

Jan 18 2021
The Polimi Fintech Series, under the fintech-ho2020.eu and the Cost Fin-AI.eu project, presents
 
January 18th, 2021 – 17.30 (CET)
 
Virtual room: Click here to access the Zoom Virtual Room, or insert the Meeting id on your Zoom app: 824 7266 9724
 
M. Azzone (Politecnico di Milano)
with E. Barucci, G. Giuffra and D. Marazzina
 
A Machine Learning Model for Lapse Prediction in Life Insurance Contracts
Abstract:
In this work, we use the Random Forest methodology to predict the lapse decision of life contracts by policyholders. The methodology outperforms the classical logistic model in describing the phenomenon. We use global and local interpretability tools to investigate how the model works. We show that non economic features (time passed from the incipit of the contract and the time to expiry, as well as the insurance company) play a significant effect in determining the lapse decision while economic/financial features (except the disposable income growth rate) play a limited effect. The analysis shows that linear models, such as the logistic model, may not be adequate to capture the heterogeneity of financial decisions.
 
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