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The classic danger here is that it's very easy to accidentally overfit. What people tend to do when they get a perfectly good actuarial model and then hear that
by kqr 4y ago
The classic danger here is that it's very easy to accidentally overfit. What people tend to do when they get a perfectly good actuarial model and then hear that they can "enrich" it with additional data is that they start modeling noise. This is obviously not good to stay profitable as an insurance firm.
- disgruntledphd2 4y agoyeah, that's fair (and not a problem unique to acturial models). That being said, enrichment with public data/claims data etc is generally incredibly effective, so as always, what data you add matters a lot more than whether or not you add data.