# On the Validation of Claims with Excess Zeros in Liability Insurance: A Comparative Study

## Abstract

**:**

## 1. Introduction

## 2. Methodology and Notation

## 3. Data

## 4. Results

## 5. Validation

## 6. Conclusions

## Funding

## Acknowledgments

## Conflicts of Interest

## Appendix A

# Loading the prepared data Data <- read.csv("Year0.csv", header = TRUE) # Creating training and validation datasets set.seed(123567) random <- runif(dim(Data)[1]) # Training set is our data <<0.6 train <- random < 0.6 DataTrain <- cbind(Data, random, train) # Validation set is everything not included in training set valid <- !(train) ; DataValid <- cbind(Data, random, valid) # Exporting our sets write.csv(DataTrain[train == TRUE,], "DataTrain.csv") write.csv(DataValid[valid == TRUE,], "DataValid.csv") # Codes to produce Table^{~}\ref{tab.2}: DataTrain <- read.csv("DataTrain.csv", header = TRUE) # Remove negative claim amounts DataTrain$claim_amount[DataTrain$claim_amount < 30] <- 0 # Adjusting claim numbers DataTrain$claim_nb <- DataTrain$claim_nb ∗ (DataTrain$claim_amount > 0) # Removing zeros DataTrain$drv_age2[DataTrain$drv_age2==0] <- NA DataTrain$vh_value[DataTrain$vh_value==0] <- NA DataTrain$vh_cyl[DataTrain$vh_cyl==0] <- NA DataTrain$vh_weight[DataTrain$vh_weight==0] <- NA DataTrain$drv_drv2[DataTrain$drv_drv2==0] <- NA # Separating the training set into two sets of policies with and without claims NClaim <- subset(DataTrain, DataTrain$claim_nb == 0) Claim <- subset(DataTrain, DataTrain$claim_nb > 0) # Calculations for all policies Mydata <- data.frame(cbind(DataTrain$claim_nb, DataTrain$pol_duration, DataTrain$pol_sit_duration, DataTrain$drv_age1, DataTrain$drv_age2, DataTrain$vh_value, DataTrain$vh_age, DataTrain$vh_cyl, DataTrain$vh_speed, DataTrain$vh_weight, DataTrain$vh_din)) Mean <- sapply(Mydata, mean, na.rm = TRUE) SD <- sapply(Mydata, sd, na.rm = TRUE) # Calculations for policies without claims NMydata <- data.frame(cbind(NClaim$claim_nb, NClaim$pol_duration, NClaim$pol_sit_duration, NClaim$drv_age1, NClaim$drv_age2, NClaim$vh_value, NClaim$vh_age, NClaim$vh_cyl, NClaim$vh_speed, NClaim$vh_weight,NClaim$vh_din)) NMean <- with(NClaim, sapply(NMydata, mean, na.rm = TRUE)) NSD <- with(NClaim, sapply(NMydata, sd, na.rm = TRUE)) # Calculations for policies with claims CMydata <- data.frame(cbind(Claim$claim_nb, Claim$pol_duration, Claim$pol_sit_duration, Claim$drv_age1, Claim$drv_age2, Claim$vh_value, Claim$vh_age, Claim$vh_cyl, Claim$vh_speed, Claim$vh_weight, Claim$vh_din)) CMean <- with(Claim, sapply(CMydata, mean, na.rm = TRUE)) CSD <- with(Claim, sapply(CMydata, sd, na.rm = TRUE)) # Modelling DataTrain <- read.csv("DataTrain.csv", header = TRUE) DataTrain$claim_amount[DataTrain$claim_amount < 30] <- 0 DataTrain$claim_nb <- DataTrain$claim_nb ∗ (DataTrain$claim_amount > 0) # Re-leveling categorical variables: DataTrain$drv_sex1_r <- relevel(factor(DataTrain$drv_sex1), ref = "M") DataTrain$pol_coverage_r <- relevel(factor(DataTrain$pol_coverage), ref = "Maxi") DataTrain$pol_pay_freq_r <- relevel(factor(DataTrain$pol_pay_freq), ref = "Yearly") DataTrain$pol_payd_r <- relevel(factor(DataTrain$pol_payd), ref = "No") DataTrain$pol_usage_r <- relevel(factor(DataTrain$pol_usage), ref = "WorkPrivate") DataTrain$vh_fuel_r <- relevel(factor(DataTrain$vh_fuel), ref = "Diesel") DataTrain$vh_type_r <- relevel(factor(DataTrain$vh_type), ref = "Tourism") DataTrain$drv_drv2_r <- relevel(factor(DataTrain$drv_drv2), ref = "No")# Poisson regression Model.poi <- glm(claim_nb^{~}drv_age1 + drv_age2 + drv_sex1_r + drv_drv2_r + pol_sit_duration + pol_bonus + pol_coverage_r + pol_pay_freq_r + pol_payd_r + pol_usage_r + pol_duration + vh_fuel_r + vh_type_r + vh_din + vh_age + vh_speed, data = DataTrain, family = poisson(link = "log"), offset = log(Exposures), na.action = na.omit) # Logistic regression # y=1 represents claim and y=0 no claim DataTrain$y[DataTrain$claim_nb==0] <- 0 DataTrain$y[DataTrain$claim_nb > 0] <- 1 # Model: Model.log <- glm(y^{~}drv_age1 + drv_age2 + drv_sex1_r + drv_drv2_r + pol_sit_duration + pol_bonus + pol_coverage_r + pol_pay_freq_r + pol_payd_r + pol_usage_r + pol_duration + vh_fuel_r + vh_type_r + vh_din + vh_age + vh_speed, data = DataTrain, family = binomial(link = "logit"), na.action = na.omit)# ZIP regression library("pscl") Model.zeropoi <- zeroinfl(claim_nb^{~}drv_age1 + drv_age2 + drv_sex1_r + drv_drv2_r + pol_sit_duration + pol_bonus + pol_coverage_r + pol_pay_freq_r + pol_payd_r + pol_usage_r + pol_duration + vh_fuel_r + vh_type_r + vh_din + vh_age + vh_speed, data = DataTrain, na.action = na.omit, dist = "poisson", link = "logit") # Validation: # loading validation set DataValid <- read.csv("DataValid.csv", header = TRUE) DataValid$claim_amount[DataValid$claim_amount < 30] <- 0 DataValid$claim_nb <- DataValid$claim_nb ∗ (DataValid$claim_amount > 0) # DataValid$pol_coverage_r <- DataValid$pol_coverage DataValid$vh_fuel_r <- DataValid$vh_fuel DataValid$vh_type_r <- DataValid$vh_type DataValid$pol_pay_freq_r <- DataValid$pol_pay_freq DataValid$pol_payd_r <- DataValid$pol_payd DataValid$drv_drv2_r <- DataValid$drv_drv2 DataValid$pol_usage_r <- DataValid$pol_usage DataValid$drv_sex1_r <- DataValid$drv_sex1 DataValid$y[DataValid$claim_nb==0] <- 0 DataValid$y[DataValid$claim_nb > 0] <- 1 # Prediction: predict.poi <- predict(Model.poi, DataValid, type = "response") # predict.log <- predict(Model.log, DataValid, type = "response") # predict.zeropoi <- cbind( DataValid, Mean = predict(Model.zeropoi, DataValid, type = "response"),Probab = predict(Model.zeropoi, DataValid, type = "prob")) # Test for dispersion library("AER") dispersiontest(Model.poi,trafo=1) Model.neg <- MASS::glm.nb(claim_nb^{~}drv_age1 + drv_age2 + drv_drv2_r + pol_sit_duration + pol_bonus + pol_coverage_r + pol_payd_r + pol_usage_r + vh_fuel_r + vh_din + vh_age , data = DataTrain, link = "log", na.action = na.omit) odTest(Model.neg) # Codes to predict zero claims: sum(exp(-predict(Model.poi, DataValid, type = "response"))) sum(1-predict(Model.log, DataValid, type = "response")) sum(predict(Model.zeropoi, DataValid, type = "prob")[,1])

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1 | This happens due to subrogation rights of the insurer. |

2 | According to the game document, hybrid cars were not popular at the time of collecting this dataset. |

Control | Policy | Driver (1 and 2) | Vehicle | Response |
---|---|---|---|---|

policy ID | bonus coefficient | driver 2? | age | number of claims |

type of coverage | age | cylinder | ||

duration | gender | din power | ||

situation duration | fuel type | |||

payment frequency | max speed | |||

subscription to MB | type | |||

usage | value | |||

weight |

Variables | All Policies | Policies without Claims | Policies with Claims | |||
---|---|---|---|---|---|---|

Mean | SD | Mean | SD | Mean | SD | |

Policy duration | $11.09$ | $8.56$ | $11.13$ | $8.57$ | $10.78$ | $8.56$ |

Policy duration since the last change | $2.74$ | $2.36$ | $2.78$ | $2.41$ | $2.40$ | $2.36$ |

Driver age 1 | $54.65$ | $14.86$ | $54.75$ | $14.86$ | $53.84$ | $14.86$ |

Driver age 2 | $46.93$ | $16.21$ | $47.06$ | $16.19$ | $46.04$ | $16.21$ |

Vehicle value | 18,086 | 8677.92 | 17,858 | 8618.47 | 19,894 | 8677.92 |

Vehicle age | $9.56$ | $7.03$ | $9.84$ | $7.19$ | $7.30$ | $7.03$ |

Engine cylinder | 1645 | $460.59$ | 1,639 | $464.05$ | 1,696 | $460.59$ |

Speed | $170.71$ | $23.48$ | $170.13$ | $23.69$ | $175.31$ | $23.48$ |

Weight | $1171.59$ | $288.39$ | 1164.36 | $288.68$ | $1228.89$ | $288.39$ |

Motor power (din) | $91.43$ | $34.41$ | $90.58$ | $34.35$ | $98.23$ | $34.41$ |

Variables | Categories | Claim Frequency | Total | ||||||
---|---|---|---|---|---|---|---|---|---|

0 | 1 | 2 | 3 | 4 | 5 | 6 | |||

Policy usage | WorkPrivate | 35,248 | $\mathrm{3,877}$ | 450 | 49 | 7 | 0 | 1 | 39,632 |

$88.94\%$ | $9.78\%$ | $1.14\%$ | |||||||

Retired | 14,193 | $\mathrm{1,462}$ | 191 | 20 | 3 | 0 | 0 | 15,869 | |

$89.44\%$ | $9.21\%$ | $1.20\%$ | |||||||

Professional | $\mathrm{3,729}$ | 544 | 76 | 10 | 0 | 0 | 0 | $\mathrm{4,359}$ | |

$85.55\%$ | $12.48\%$ | $1.74\%$ | |||||||

All trips | 41 | 10 | 1 | 0 | 0 | 0 | 0 | 52 | |

$78.85\%$ | $19.23\%$ | $1.92\%$ | |||||||

Policy coverage | Maxis | 33,459 | 4,489 | 600 | 70 | 9 | 0 | 1 | 38,628 |

$86.62\%$ | $11.62\%$ | $1.55\%$ | |||||||

Median 2 | 9,628 | 862 | 82 | 7 | 1 | 0 | 0 | 10,580 | |

$91.00\%$ | $8.15\%$ | $0.78\%$ | |||||||

Median 1 | $\mathrm{5,122}$ | 412 | 32 | 2 | 0 | 0 | 0 | $\mathrm{5,568}$ | |

$91.99\%$ | $7.04\%$ | $0.57\%$ | |||||||

Mini | $\mathrm{5,002}$ | 130 | 4 | 0 | 0 | 0 | 0 | $\mathrm{5,136}$ | |

$97.39\%$ | $2.53\%$ | $0.08\%$ | |||||||

Subscription to MB | No | 50,946 | $\mathrm{5,714}$ | 693 | 76 | 10 | 0 | 1 | 57,440 |

$88.69\%$ | $9.95\%$ | $1.21\%$ | |||||||

Yes | $\mathrm{2,265}$ | 179 | 25 | 3 | 0 | 0 | 0 | $\mathrm{2,472}$ | |

$91.63\%$ | $7.24\%$ | $1.01\%$ | |||||||

Payment | Yearly | 20,094 | $\mathrm{2,106}$ | 263 | 25 | 3 | 0 | 1 | 22,492 |

$89.34\%$ | $9.36\%$ | $1.17\%$ | |||||||

Biannual | 15,930 | 1,746 | 199 | 29 | 3 | 0 | 0 | 17,907 | |

$88.96\%$ | $9.75\%$ | $1.11\%$ | |||||||

Monthly | 15,880 | $\mathrm{1,875}$ | 234 | 23 | 4 | 0 | 0 | 18,016 | |

$88.14\%$ | $10.41\%$ | $1.30\%$ | |||||||

Quarterly | $\mathrm{1,307}$ | 166 | 22 | 2 | 0 | 0 | 0 | $\mathrm{1,497}$ | |

$87.31\%$ | $11.09\%$ | $1.47\%$ | |||||||

Policy with 2 drivers | No | 35,675 | $\mathrm{3,814}$ | 457 | 47 | 6 | 0 | 0 | 39,999 |

$89.19\%$ | $9.54\%$ | $1.14\%$ | |||||||

Yes | 17,536 | 2,079 | 261 | 32 | 4 | 0 | 1 | 19,913 | |

$88.06\%$ | $10.44\%$ | $1.31\%$ | |||||||

Gender 1 | Male | 32,118 | $\mathrm{3,501}$ | 433 | 52 | 4 | 0 | 0 | 36,108 |

$88.95\%$ | $9.70\%$ | $1.20\%$ | |||||||

Female | 21,093 | $\mathrm{2,392}$ | 285 | 27 | 6 | 0 | 1 | 23,804 | |

$88.61\%$ | $10.05\%$ | $1.20\%$ | |||||||

Age 1 | 18–30 | $\mathrm{2,471}$ | 299 | 29 | 4 | 0 | 0 | 1 | $\mathrm{2,804}$ |

$88.12\%$ | $10.66\%$ | $1.03\%$ | |||||||

31–50 | 18,961 | $\mathrm{2,228}$ | 256 | 24 | 4 | 0 | 0 | 21,473 | |

$88.30\%$ | $10.38\%$ | $1.19\%$ | |||||||

51–70 | 22,978 | $\mathrm{2,479}$ | 322 | 40 | 3 | 0 | 0 | 25,822 | |

$89.99\%$ | $9.60\%$ | $1.25\%$ | |||||||

71–85 | 8,154 | 822 | 105 | 9 | 3 | 0 | 0 | $\mathrm{9,093}$ | |

$89.67\%$ | $9.04\%$ | $1.15\%$ | |||||||

$85+$ | 647 | 65 | 6 | 2 | 0 | 0 | 0 | 720 | |

$89.86\%$ | $9.03\%$ | $0.83\%$ | |||||||

Vehicle fuel | Diesel | 28,605 | $\mathrm{3,783}$ | 475 | 54 | 7 | 0 | 1 | 32,925 |

$86.88\%$ | $11.49\%$ | $1.44\%$ | |||||||

Gasoline | 24,565 | $\mathrm{2,104}$ | 241 | 25 | 3 | 0 | 0 | 26,938 | |

$91.19\%$ | $7.81\%$ | $0.89\%$ | |||||||

Hybrid | 41 | 6 | 2 | 0 | 0 | 0 | 0 | 49 | |

$83.67\%$ | $12.24\%$ | $4.08\%$ | |||||||

Vehicle type | Tourism | 47,891 | $\mathrm{5,387}$ | 668 | 73 | 10 | 0 | 1 | 54,030 |

$88.64\%$ | $9.97\%$ | $1.24\%$ | |||||||

Commercial | $\mathrm{5,320}$ | 506 | 50 | 6 | 0 | 0 | 0 | $\mathrm{5,882}$ | |

$90.45\%$ | $8.60\%$ | $0.85\%$ | |||||||

Total | 53,211 | 5,893 | 718 | 79 | 10 | 0 | 1 | 59,912 |

Coefficients | Model 1: All Variables | Model 2: Stepwise Selection | Model 3: Only Significant | |||
---|---|---|---|---|---|---|

Estimate | p-Value | Estimate | p-Value | Estimate | p-Value | |

Intercept | $-2.6883$ | <$0.0001$ | $-2.5645$ | <$0.0001$ | $-2.4729$ | <$0.0001$ |

Age 1 | $0.0048$ | $0.0001$ | $0.0048$ | $0.0002$ | $0.0036$ | $0.0026$ |

Age 2 | $-0.0034$ | $0.0084$ | $-0.0034$ | $0.0087$ | $-0.0033$ | $0.0111$ |

Female 1 | $0.0380$ | $0.1251$ | $0.0374$ | $0.1285$ | ||

Driver2? | $0.1790$ | $0.0057$ | $0.1781$ | $0.0060$ | $0.1717$ | $0.0080$ |

Situation duration | $-0.0185$ | $0.0078$ | $-0.0185$ | $0.0080$ | $-0.0220$ | $0.0013$ |

Bonus | $0.8677$ | <$0.0001$ | $0.8683$ | <$0.0001$ | $0.9125$ | <$0.0001$ |

Coverage(Med2) | $-0.1854$ | <$0.0001$ | $-0.1847$ | <$0.0001$ | $-0.1877$ | <$0.0001$ |

Coverage(Med1) | $-0.2282$ | <$0.0001$ | $-0.2280$ | <$0.0001$ | $-0.2306$ | <$0.0001$ |

Coverage(Mini) | $-1.2611$ | <$0.0001$ | $-1.2631$ | <$0.0001$ | $-1.2723$ | <$0.0001$ |

Payment(biannual) | $0.0485$ | $0.0919$ | $0.0487$ | $0.0908$ | ||

Payment(quarterly) | $0.1676$ | $0.0184$ | $0.1681$ | $0.0181$ | ||

Payment(monthly) | $0.0911$ | $0.0018$ | $0.0912$ | $0.0018$ | ||

Subscription to MB | $-0.1586$ | $0.0198$ | $-0.1587$ | $0.0197$ | $-0.1675$ | $0.01370$ |

Usage(retired) | $-0.0304$ | $0.4331$ | $-0.0297$ | $0.4433$ | $-0.0315$ | $0.4146$ |

Usage(professional) | $0.1536$ | $0.0003$ | $0.1535$ | $0.0002$ | $0.1481$ | $0.0002$ |

Usage(all trips) | $0.3451$ | $0.2328$ | $0.3456$ | $0.2321$ | $0.3448$ | $0.2332$ |

Duration | $-0.0025$ | $0.0969$ | $-0.0025$ | $0.0978$ | ||

Fuel(gasoline) | $-0.2621$ | <$0.0001$ | $-0.2630$ | <$0.0001$ | $-0.2607$ | <$0.0001$ |

Fuel(hybrid) | $0.1265$ | $0.6896$ | $0.1225$ | $0.6988$ | $0.1196$ | $0.70588$ |

Type(commercial) | $0.0318$ | $0.5466$ | ||||

Din(power) | $0.0022$ | $0.0004$ | $0.0026$ | <$0.0001$ | $0.0024$ | <$0.0001$ |

Vehicle age | $-0.0316$ | <$0.0001$ | $-0.0318$ | <$0.0001$ | $-0.0332$ | <$0.0001$ |

Vehicle speed | $0.0009$ | $0.3967$ | ||||

Log-likelihood | −23,207 | −23,207 | −23,216 | |||

Degrees of freedom | 24 | 22 | 17 | |||

AIC | 46,462 | 46,458 | 46,466 | |||

BIC | 46,678 | 46,656 | 46,619 | |||

Running time (s) | $0.761$ | $7.336$ | $0.601$ |

Coefficients | Model 1: All variables | Model 2: Stepwise Selection | Model 3: Only Significant | |||
---|---|---|---|---|---|---|

Estimate | p-Value | Estimate | p-Value | Estimate | p-Value | |

Intercept | $-2.6571$ | <$0.0001$ | $-2.5321$ | <$0.0001$ | $-2.4255$ | <$0.0001$ |

Age 1 | $0.0043$ | $0.0036$ | $0.0038$ | $0.0066$ | $0.0032$ | $0.0226$ |

Age 2 | $-0.0048$ | $0.0011$ | $-0.0047$ | $0.0013$ | $-0.0047$ | $0.0013$ |

Female 1 | $0.0441$ | $0.1198$ | $0.0428$ | $0.1275$ | ||

Driver2? | $0.2410$ | $0.0012$ | $0.2363$ | $0.0014$ | $0.2340$ | $0.0016$ |

Situation duration | $-0.0234$ | $0.0027$ | $-0.0248$ | $0.0013$ | $-0.0265$ | $0.0006$ |

Bonus | $0.9017$ | <$0.0001$ | $0.9151$ | <$0.0001$ | $0.9447$ | <$0.0001$ |

Coverage(Med2) | $-0.1814$ | <$0.0001$ | $-0.1786$ | <$0.0001$ | $-0.1832$ | <$0.0001$ |

Coverage(Med1) | $-0.2111$ | $0.0005$ | $-0.2061$ | $0.0007$ | $-0.2132$ | $0.0004$ |

Coverage(Mini) | $-1.2481$ | <$0.0001$ | $-1.2438$ | <$0.0001$ | $-1.2589$ | <$0.0001$ |

Payment(biannual) | $0.0522$ | $0.1121$ | $0.0490$ | $0.1335$ | ||

Payment(quarterly) | $0.1852$ | $0.0240$ | $0.1883$ | $0.0217$ | ||

Payment(monthly) | $0.0939$ | $0.0049$ | $0.0936$ | $0.0051$ | ||

Subscription to MB | $-0.2014$ | $0.0088$ | $-0.2038$ | $0.0080$ | $-0.2098$ | $0.0063$ |

Usage(retired) | $-0.0180$ | $0.6847$ | $-0.0149$ | $0.7364$ | $-0.0203$ | $0.6455$ |

Usage(professional) | $0.1691$ | $0.0007$ | $0.1733$ | $0.0002$ | $0.1664$ | $0.0004$ |

Usage(all trips) | $0.4841$ | $0.1577$ | $0.4856$ | $0.1563$ | $0.4835$ | $0.1577$ |

Duration | $-0.0019$ | $0.2708$ | ||||

Fuel(gasoline) | $-0.2885$ | <$0.0001$ | $-0.2914$ | <$0.0001$ | $-0.2875$ | <$0.0001$ |

Fuel(hybrid) | $0.0707$ | $0.8560$ | $0.0691$ | $0.8592$ | $0.0598$ | $0.8778$ |

Type(commercial) | $0.0462$ | $0.4402$ | ||||

Din(power) | $0.0022$ | $0.0019$ | $0.0027$ | <$0.0001$ | $0.0025$ | <$0.0001$ |

Vehicle age | $-0.0336$ | <$0.0001$ | $-0.0336$ | <$0.0001$ | $-0.0332$ | <$0.0001$ |

Vehicle speed | $0.0010$ | $0.4404$ | ||||

Log-likelihood | −20,292 | −20,293 | −20,299 | |||

Degrees of freedom | 24 | 21 | 17 | |||

AIC | 40,632 | 40,628 | 40,633 | |||

BIC | 40,848 | 40,817 | 40,785 | |||

Running time (s) | $0.634$ | $31.611$ | $0.431$ |

Coefficients | Model 1 * | Model 2 * | Model 3 * | ||||||
---|---|---|---|---|---|---|---|---|---|

Estimate | p-Value | Estimate | p-Value | Estimate | p-Value | ||||

Poisson (count) part | |||||||||

Intercept | −2.2750 | <$0.0001$ | −2.1404 | <$0.0001$ | −2.0736 | <$0.0001$ | |||

Age 1 | 0.0066 | 0.0513 | 0.0063 | 0.0542 | 0.0046 | 0.1347 | |||

Age 2 | 0.0012 | 0.6647 | 0.0013 | 0.6290 | 0.0019 | 0.4998 | |||

Female 1 | −0.0448 | 0.4746 | −0.0479 | 0.4324 | |||||

Driver2? | −0.0473 | 0.7366 | −0.0536 | 0.6972 | −0.0809 | 0.5584 | |||

Situation duration | −0.0009 | 0.0194 | −0.0017 | 0.9282 | −0.0011 | 0.9558 | |||

Bonus | 0.5787 | 0.2021 | 0.5953 | 0.2068 | 0.5433 | 0.2026 | |||

Coverage(Med2) | −0.3670 | 0.0006 | −0.3734 | 0.0004 | −0.3646 | 0.0006 | |||

Coverage(Med1) | −0.4294 | 0.0022 | −0.4231 | 0.0022 | −0.4269 | 0.0024 | |||

Coverage(Mini) | −1.0487 | 0.0017 | −1.0599 | 0.0016 | −1.1031 | 0.0007 | |||

Payment(biannual) | −0.0691 | 0.3318 | −0.0668 | 0.3472 | |||||

Payment(quarterly) | -0.0569 | 0.7525 | −0.0452 | 0.8002 | |||||

Payment(monthly) | 0.0091 | 0.8961 | 0.0137 | 0.8427 | |||||

Subscription to MB | 0.0596 | 0.7580 | 0.0462 | 0.8099 | 0.0126 | 0.9486 | |||

Usage(retired) | −0.0623 | 0.5523 | −0.0623 | 0.5455 | −0.0538 | 0.6006 | |||

Usage(professional) | 0.0723 | 0.5491 | 0.0710 | 0.5063 | 0.0952 | 0.3725 | |||

Usage(all trips) | 0.2543 | 0.6523 | 0.2375 | 0.6765 | −0.0332 | 0.9544 | |||

Duration | −0.0043 | 0.2948 | −0.0025 | 0.1145 | |||||

Fuel(gasoline) | −0.0346 | 0.6549 | −0.0387 | 0.6228 | −0.0759 | 0.3854 | |||

Fuel(hybrid) | 0.6976 | 0.2553 | 0.7050 | 0.2500 | 0.6366 | 0.3302 | |||

Type(commercial) | 0.0284 | 0.8457 | |||||||

Din(power) | 0.0023 | 0.3055 | 0.0026 | 0.1207 | 0.0024 | 0.3063 | |||

Vehicle age | 0.0024 | 0.7925 | 0.0032 | 0.1207 | 0.0063 | 0.4799 | |||

Vehicle speed | 0.0010 | 0.7557 | |||||||

Zero-inflation part | |||||||||

Intercept | −0.5544 | 0.6449 | −0.4634 | 0.6883 | −0.4819 | 0.6826 | |||

Age 1 | 0.0040 | 0.5922 | 0.0032 | 0.6558 | 0.0020 | 0.7736 | |||

Age 2 | 0.0108 | 0.0653 | 0.0111 | 0.0546 | 0.0121 | 0.0356 | |||

Female 1 | −0.1962 | 0.1572 | −0.2020 | 0.1358 | |||||

Driver2? | −0.5491 | 0.0892 | −0.5633 | 0.0748 | −0.6165 | 0.0522 | |||

Situation duration | 0.0331 | 0.3289 | 0.0309 | 0.3575 | 0.0387 | 0.2442 | |||

Bonus | −0.8651 | 0.4958 | −0.8200 | 0.5308 | −1.0637 | 0.3802 | |||

Coverage(Med2) | −0.3798 | 0.1014 | −0.3932 | 0.0848 | −0.3595 | 0.1139 | |||

Coverage(Med1) | −0.4030 | 0.1541 | −0.3871 | 0.1601 | −0.3847 | 0.1645 | |||

Coverage(Mini) | 0.2803 | 0.5949 | 0.2610 | 0.6222 | 0.2052 | 0.6923 | |||

Payment(biannual) | −0.2596 | 0.0910 | −0.2547 | 0.0963 | |||||

Payment(quarterly) | −0.5661 | 0.2637 | −0.5354 | 0.2798 | |||||

Payment(monthly) | −0.1721 | 0.2518 | −0.1615 | 0.2751 | |||||

Subscription to MB | 0.4226 | 0.2041 | 0.3978 | 0.2310 | 0.3560 | 0.3030 | |||

Usage(retired) | −0.0775 | 0.7250 | −0.0783 | 0.7177 | −0.0533 | 0.8043 | |||

Usage(professional) | −0.2215 | 0.4672 | −0.2273 | 0.4063 | −0.1510 | 0.5703 | |||

Usage(all trips) | −0.3050 | 0.8550 | −0.3668 | 0.8345 | −1.8681 | 0.7405 | |||

Duration | −0.0040 | 0.6448 | |||||||

Fuel(gasoline) | 0.5066 | 0.0017 | 0.5002 | 0.0021 | 0.4090 | 0.0236 | |||

Fuel(hybrid) | 114.80 | 0.1984 | 116.60 | 0.1890 | 1.0632 | 0.2829 | |||

Type(commercial) | 0.0041 | 0.9901 | |||||||

Din(power) | 0.0000 | 0.9944 | -0.0000 | 0.9959 | −0.0002 | 0.9627 | |||

Vehicle age | 0.0696 | <$0.0001$ | 0.0712 | <$0.0001$ | 0.0756 | <$0.0001$ | |||

Vehicle speed | 0.0006 | 0.9258 | |||||||

Log-likelihood | −23,044 | −23,045 | −23,054 | ||||||

Degrees of freedom | 48 | 43 | 34 | ||||||

AIC | 46,184 | 46,175 | 46,177 | ||||||

BIC | 46,616 | 46,563 | 46,482 | ||||||

Running time (s) | 16.719 | $18.81$ | $13.951$ |

Prob Zero Claims: Individual 1 ** | Prob Zero Claims: Individual 2 *** | Total No. of Zero Claims | Total No. of Non-Zero Claims | |||
---|---|---|---|---|---|---|

Observed value | 0 | 1 | 35,772 | 4316 | ||

Poisson | Full model | 0.9016 | 0.8358 | 35,361.44 | 4726.56 | |

Stepwise | 0.9019 | 0.8350 | 35,361.27 | 4726.73 | ||

Significant | 0.9019 | 0.8410 | 35,360.50 | 4727.50 | ||

Logistic | Full model | 0.9097 | 0.8475 | 35,606.88 | 4481.12 | |

Stepwise | 0.9091 | 0.8480 | 35,606.95 | 4481.05 | ||

Significant | 0.9102 | 0.8512 | 35,606.62 | 4481.38 | ||

ZIP | Model 1 * | Count | 0.1024 | 0.1778 | 35,602 | 4486 |

Zero | 0.9104 | 0.8446 | ||||

Model 2 * | Count | 0.1016 | 0.1785 | 35,601.27 | 4486.74 | |

Zero | 0.9113 | 0.8440 | ||||

Model 3 * | Count | 0.1020 | 0.1710 | 35,601.06 | 4486.94 | |

Zero | 0.9113 | 0.8495 |

© 2019 by the author. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).

## Share and Cite

**MDPI and ACS Style**

Qazvini, M.
On the Validation of Claims with Excess Zeros in Liability Insurance: A Comparative Study. *Risks* **2019**, *7*, 71.
https://doi.org/10.3390/risks7030071

**AMA Style**

Qazvini M.
On the Validation of Claims with Excess Zeros in Liability Insurance: A Comparative Study. *Risks*. 2019; 7(3):71.
https://doi.org/10.3390/risks7030071

**Chicago/Turabian Style**

Qazvini, Marjan.
2019. "On the Validation of Claims with Excess Zeros in Liability Insurance: A Comparative Study" *Risks* 7, no. 3: 71.
https://doi.org/10.3390/risks7030071