Recommendation System for Insurance Policies : An Investigation of Unsupervised and Supervised Learning Techniques

Sammanfattning: Recommendation systems have significantly influenced user experiences across various industries, yet their application in the insurance sector remains relatively unexplored. This thesis focuses on developing a car insurance recommendation system that implements a `consumers like you' feature. The study initially employs a clustering-based recommendation system due to missing labels in an offline environment. However, challenges emerge, such as determining the optimal number of clusters and managing complex data. Additionally, the inability to effectively update based on feedback and lower predictive performance compared to supervised methods necessitated exploring supervised alternatives. In response, this thesis proposes a methodology where the unsupervised approach simulates consumer behavior in an offline environment. Supervised alternatives are pre-trained on the clustering-based system to replicate it and come with the ability to be fine-tuned based on live traffic. Three supervised alternatives — KNN, XGBoost, and a neural network — are developed and compared. Given the supervised recommendation system adaptability based on feedback, supervised methods can provide more accurate, personalized recommendations in the insurance domain. The XGBoost and neural network-based recommendation systems were able to replicate the unsupervised approach, and their expressive power makes them valid candidate models to further evaluate on live traffic. The thesis concludes with the potential to both improve and adapt these recommendation systems to other insurance types, marking a significant step toward more personalized, user-friendly insurance services.