<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Customer segmentation represents a true challenge in the automobile insurance industry, as datasets are large, multidimensional, unbalanced and it also requires a unique price determination based on the risk profile of the customer. Furthermore, the price determination of an insurance policy or the validity of the compensation claim, in most cases must be an instant decision. Therefore, the purpose of this research is to identify an easily usable data mining tool that is capable to identify key automobile insurance fraud indicators, facilitating the segmentation. In addition, the methods used by the tool, should be based primarily on numerical and categorical variables, as there is no well-functioning text mining tool for Central Eastern European languages. Hence, we decided on the SQL Server Analysis Services (SSAS) tool and to compare the performance of the decision tree, neural network and Naïve Bayes methods. The results suggest that decision tree and neural network are more suitable than Naïve Bayes, however the best conclusion can be drawn if we use the decision tree and neural network together.</p></abstract>

Customer segmentation represents a true challenge in the automobile insurance industry, as datasets are large, multidimensional, unbalanced and it also requires a unique price determination based on the risk profile of the customer. Furthermore, the price determination of an insurance policy or the validity of the compensation claim, in most cases must be an instant decision. Therefore, the purpose of this research is to identify an easily usable data mining tool that is capable to identify key automobile insurance fraud indicators, facilitating the segmentation. In addition, the methods used by the tool, should be based primarily on numerical and categorical variables, as there is no well-functioning text mining tool for Central Eastern European languages. Hence, we decided on the SQL Server Analysis Services (SSAS) tool and to compare the performance of the decision tree, neural network and Naïve Bayes methods. The results suggest that decision tree and neural network are more suitable than Naïve Bayes, however the best conclusion can be drawn if we use the decision tree and neural network together.

Identifying Key Fraud Indicators in the Automobile Insurance Industry Using SQL Server Analysis Services

Studia Universitatis Babes-Bolyai Oeconomica

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Customer segmentation represents a true challenge in the automobile insurance industry, as datasets are large, multidimensional, unbalanced and it also...

Identifying Key Fraud Indicators in the Automobile Insurance Industry Using SQL Server Analysis Services

Published Online: Sep 09, 2019

Page range: 53 - 71

DOI: https://doi.org/10.2478/subboec-2019-0009

Keywords
automobile insurance, insurance fraud, fraud indicators, data mining

© 2019 Botond Benedek et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Identifying Key Fraud Indicators in the Automobile Insurance Industry Using SQL Server Analysis Services

Published Online: Sep 09, 2019

Page range: 53 - 71

DOI: https://doi.org/10.2478/subboec-2019-0009

Keywordsautomobile insurance, insurance fraud, fraud indicators, data mining

© 2019 Botond Benedek et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
automobile insurance, insurance fraud, fraud indicators, data mining