Title: How machine learning is transforming the insurance sector: case of fraud detection in Morocco

Authors: Nabila Hamdoun

Addresses: Laboratory of Research in Management and Organization Science (RSGO), ENCG, Ibn Tofail University, Kenitra, Morocco

Abstract: Artificial intelligence and machine learning can play a crucial role in fraud detection, especially in the insurance sector by providing an effective way to identify fraudulent activity, reducing costs and increasing profitability for the company. This paper illustrates the business value of applying machine learning algorithms for predicting fraudulent behaviour in auto insurance claims. In addition, the paper offers a comparison between two algorithms known for their high performance: random forest and XG-boosting machine with a statistical model: linear discriminant analysis (LDA), and find that XG-boosting machine performs better on Moroccan customer data than others. This study aims to encourage insurance companies to take advantage of recent advances in artificial intelligence and machine learning to solve business challenges especially in the fraud detection process.

Keywords: machine learning; random forest; XG-boosting machine; insurance; fraud detection; Morocco.

DOI: 10.1504/IJAPR.2021.118913

International Journal of Applied Pattern Recognition, 2021 Vol.6 No.4, pp.273 - 282

Received: 20 Feb 2021
Accepted: 22 Feb 2021
Published online: 11 Nov 2021 *

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