Make Data Science Easy [practice] Vehicle Insurance EDA
Problem Statement
An insurance policy is an arrangement by which a company undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for the payment of a specified premium. A premium is a sum of money that the customer needs to pay regularly to an insurance company for this guarantee.
For example, you may pay a premium of Rs. 5000 each year for a health insurance cover of Rs. 200,000/- so that if God forbid, you fall ill and need to be hospitalized in that year, the insurance provider company will bear the cost of hospitalization, etc. for up to Rs. 200,000. Now if you are wondering how the can company bear such high hospitalization cost when it charges a premium of only Rs. 5000/-, that is where the concept of probabilities comes into the picture. For example, like you, there may be 100 customers who would be paying a premium of Rs. 5000 every year, but only a few of them (say 2–3) would get hospitalized that year, and not everyone. This way everyone shares the risk of everyone else.
Just like medical insurance, there is vehicle insurance where every year customer needs to pay a premium of a certain amount to insurance provider company so that in case of unfortunate accident by the vehicle, the insurance provider company will provide compensation (called ‘sum assured’) to the customer.
Business Goal
Building a model to predict whether a customer would be interested in Vehicle Insurance is extremely helpful for the company because it can then accordingly plan its communication strategy to reach out to those customers and optimize its business model and revenue.
Now, to predict, whether the customer would be interested in Vehicle insurance, you have information about demographics (gender, age, region code type), Vehicles (Vehicle Age, Damage), Policy (Premium, sourcing channel), etc.
Lets Code!
Import Libraries and Datasets
follow notebook for more details.
