FAM seminar: Textual Analysis of Insurance Claims with Large Language Models

Details

Date: Friday, 11 April, 2025

Time: 2:30-3:30 pm

Venue: MB 441

Speaker:Prof. Zhuo Jin, Macquarie University

Topic: Textual Analysis of Insurance Claims with Large Language Models

Abstract

This study proposes a comprehensive and general framework for examining discrepancies in textual content using large language models (LLMs), broadening application scenarios in the insurtech and risk management fields, and conducting empirical research based on actual needs and real-world data. Our framework integrates OpenAI's interface to embed texts and project them into external categories while utilizing distance metrics to evaluate discrepancies. To identify significant disparities, we design prompts to analyze three types of relationships: identical information, logical relationships and potential relationships. Our empirical analysis shows that 22.1% of samples exhibit substantial semantic discrepancies, and 38.1% of the samples with significant differences contain at least one of the identified relationships. The average processing time for each sample does not exceed 4 seconds, and all processes can be adjusted based on actual needs. Backtesting results and comparisons with traditional NLP methods further demonstrate that our proposed method is both effective and robust.

Speaker

Dr. Zhuo Jin is a Professor of Actuarial Studies in the Department of Actuarial Studies and Business Analytics at Macquarie Business School. He serves as the Research Director of the department and is also a Co-Director of the Centre for Emerging Risks at Macquarie University. His research focuses on actuarial science, mathematical finance, risk management, and machine learning. An Associate of the Society of Actuaries (ASA), his research has been supported by the Hong Kong Research Grants Council (RGC) and other funding bodies. He has authored over 70 publications in international journals and book chapters, including top-tier journals such as Insurance: Mathematics and Economics, European Journal of Operational Research, ASTIN Bulletin, Journal of Risk and Insurance, SIAM Journal on Control and Optimization, and Automatica. Additionally, he is a Series Editor for the book series Advances in Statistics, Probability, and Actuarial Science (ASPAS), published by World Scientific.