Write 10 page essay on the topic Risk Prediction of Automobiles.Download file "Risk Prediction of Automobiles" to see previous pages... In this case, the research will take into account the two differ

Write 10 page essay on the topic Risk Prediction of Automobiles.

In this case, the research will take into account the two different estimate values namely the insurance risk rating and the normalized losses. While the former determines the degree to which an automobile is risky than its price indicates, the latter provides the estimate of the relative average loss of payment per insured vehicle year.

One of the most prominent risk analysis methods that are in use today in various insurance companies is the insurance risk factor profiling technique. ...

usually achieved by analyzing data that has been collected over a period of time for insured entities. The information collected is segregated according to a number of variables. In the case of automobiles, the variables usually consist of both numerical and categorical data entries and most often. such data may also have noise characteristics. However, the incidence of noise in the analysis and values is minimized by using software profiling tools that help in finding out specific patterns within variables, correlations among different sets of variables and the relationships between a set of variables as the need be (William Mendenhall, 2001). Most often, these tools utilize the help of artificial intelligence logic such as neural networks and incremental learning that in addition to determining useful results, helps use existing data to determine trends for the future. However, the varied efficiency in reducing noise for different sets of data is one deficiency of these risk profiling tools. The use of software tools facilitates the extraction and processing of large volumes of data and requires minimum cost, time and effort (Douglas L. Reilly, 1996). An example of such profiling is as shown below:

Fig: risk factor profiling technique (Found at: www.roselladb.com)

However, the above method demonstrates the fact that there would be a large difference in the case where the insurance claim would be dependent on a number of factors/reasons.