Initial insurance losses are often reported with a textual description of the claim. The claims manager must determine the adequate case reserve for each known claim. In this paper, we present a framework for predicting the amount of loss given a textual description of the claim using a large number of words found in the descriptions. Prior work has focused on classifying insurance claims based on keywords selected by a human expert, whereas in this paper the focus is on loss amount prediction with automatic word selection. In order to transform words into numeric vectors, we use word cosine similarities and word embedding matrices. When we consider all unique words found in the training dataset and impose a generalised additive model to the resulting explanatory variables, the resulting design matrix is high dimensional. For this reason, we use a group lasso penalty to reduce the number of coefficients in the model. The scalable, analytical framework proposed provides for a parsimonious and interpretable model. Finally, we discuss the implications of the analysis, including how the framework may be used by an insurance company and how the interpretation of the covariates can lead to significant policy change. The code can be found in the TAGAM R package (github.com/scottmanski/TAGAM).

In insurance analytics, textual descriptions of claims are often discarded, because traditional empirical analyses require numeric descriptor variables. This paper demonstrates how textual data can be easily used in insurance analytics. Using the concept of word similarities, we illustrate how to extract variables from text and incorporate them into claims analyses using standard generalized linear model or generalized additive regression model. This procedure is applied to the Wisconsin Local Government Property Insurance Fund (LGPIF) data, in order to demonstrate how insurance claims management and risk mitigation procedures can be improved. We illustrate two applications. First, we show how the claims classification problem can be solved using textual information. Second, we analyze the relationship between risk metrics and the probability of large losses. We obtain good results for both applications, where short textual descriptions of insurance claims are used for the extraction of features.

Over the last two decades, determining the similarity between words as well as between their meanings, that is, word senses, has been proven to be of vital importance in the field of Natural Language Processing. This paper provides the reader with an introduction to the tasks of computing word and sense similarity. These consist in computing the degree of semantic likeness between words and senses, respectively. First, we distinguish between two major approaches: the knowledge-based approaches and the distributional approaches. Second, we detail the representations and measures employed for computing similarity. We then illustrate the evaluation settings available in the literature and, finally, discuss suggestions for future research.

Generating novel design concepts is a cornerstone for producing innovative products. Although many methods have been proposed for supporting the task, their performance depends on human ability. The goal of this research is to build a method supporting designers to generate novel design concepts with the knowledge of what factors have positive effects on the novelty. Toward the goal, this research assumes that the more distant two function concepts chosen, the more novel idea would come up with by the combination of the two concepts. Based on the assumption, this paper introduces a notion of novelty potential of the combination of two function concepts, and proposes a method to assess it by the function similarity. It is calculated with the integration of a lexical database for natural language called WordNet and a distributional semantics method called word2vec. The proposed method is adapted to case studies in which students perform design concept generation for given design tasks. The correlation analysis is performed to verify the assessment performance of the proposed method. This paper discusses its possibility based on the results of the case studies.