An efficient machine learning approach An efficient machine learning approach
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Machine Learning (ML) is a rapidly developing technology with applications in a wide variety of areas. This technology has great potential in the efficient evaluation (and hedging) of large complex portfolios arising in the insurance industry. For example, we estimate a portfolio of 200,000 variable annuity contracts which would require 1.5 years to risk-analyze using standard techniques whereas the machine learning approach we describe here takes 1.5 hours!
[1] T. Coleman,et al. Efficient Machine Learning Methods for Risk Management of Large Variable Annuity Portfolios ∗ , 2015 .
[2] Wei Xu,et al. Pricing American Options by Willow Tree Method Under Jump-Diffusion Process , 2014, The Journal of Derivatives.