Earnix Analytical and Technical Blog Series
How can insurers and banks tackle today’s toughest analytical challenges? At Earnix, we believe it starts with asking the right questions, challenging assumptions, and finding better ways forward.
In this blog series, we explore key issues in financial analytics—addressing complex problems, improving models, and staying competitive. Our first post covered Model Analysis, and you can check it out here.
These technical posts are designed for professionals in actuarial science, data science, and analytics, with a focus on clarity and practical insights. The second topic of the series, which we will cover today, is Auto-XGBoost. Let’s get started!
Introduction: The Rise of the Trees
In the past, Generalized Linear Models (GLMs) were the undisputed kings of insurance modeling. They were loved for many reasons, but the truth is that they simply didn’t have any competition - limited data availability and minimal computational power made advanced modeling impractical. However, in recent years the world of ML has changed dramatically – increased data availability and the rise of cloud-based computers gave way to some of the most accurate and robust machine learning algorithms. Many of those algorithms, especially in the world of tabular data, are based on decision trees.