HIDDEN MARKOV MODEL APPROACH TO DISABILITY INCEPTION PROBABILITY WITH EXPECTATION MAXIMIZATION ALGORITHM
Insurance companies are institutions that bear the risk of their customers. In order for insurance companies can continue to run, it is necessary to know the risks faced in the future. Disability is an example of risk that can be borne by insurance companies. In this final project, a disability ince...
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| Format: | Final Project |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/64992 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Insurance companies are institutions that bear the risk of their customers. In order for insurance companies can continue to run, it is necessary to know the risks faced in the future. Disability is an example of risk that can be borne by insurance companies. In this final project, a disability inception probability model is built using the hidden Markov model where the probability of disability inception is influenced by the age group which the information has been obtained and the unobserved time trend. This hidden Markov model is estimated with the expectation maximization algorithm and compared with the time series model. As an initial guess, the parameters will be estimated using logistic regression. The mean squared error is used to select the best model and the efficiency is taken into account in obtaining model parameters. |
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