Predictive Modeling Applications in Actuarial Science

Chapter 12 - Unsupervised Learning


Louise Francis | Francis Analytics and Actuarial Data Mining, Inc

Chapter Preview

The focus of this chapter will be on various methods of unsupervised learning. Unsupervised learning will be contrasted with supervised learning and the role of unsupervised learning in a supervised analysis will also be discussed. The concept of dimension reduction will first be presented. We will then introduce the common methods of dimension reduction, principal components/factor analysis and clustering. More recent developments on the classic techniques such fuzzy clustering will also be introduced. Illustrative examples will be presented that use publicly available databases. At the end of the chapter we will provide exercises that use data supplied with the chapter.

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