Implementation of Gaussian Process Regression in Estimating Motor Vehicle Insurance Claims Reserves

This study aims to calculate the allowance for losses by applying Gaussian Process regression to estimate future claims. Modeling is done on motor vehicle insurance data. The data used in this study are historical data on PT XYZ's motor vehicle insurance business line during 2017 and 2019 (January 2017 to December 2019). Data analysis will be carried out on the 2017 - 2019 data to obtain an estimate of the claim reserves in the following year, namely 2018 - 2020. This study uses the Chain Ladder method which is the most popular loss reserving method in theory and practice. The estimation results show that the Gaussian Process Regression method is very flexible and can be applied without much adjustment. These results were also compared with the Chain Ladder method. Estimated claim reserves for PT XYZ's motor vehicle business line using the chain-ladder method, the company must provide funds for 2017 of 8,997,979,222 IDR in 2018 16,194,503,605 IDR in 2019 amounting to Rp. 1,719,764,520 for backup. Meanwhile, by using the Bayessian Gaussian Process method, the company must provide funds for 2017 of 9,060,965,077 IDR in 2018 amounting to 16,307,865,130 IDR, and in 2019 1,731,802,871 IDR for backup. The more conservative Bayessian Gaussian Process method. Motor vehicle insurance data has a short development time (claims occur) so that it is included in the short-tail type of business.

Indian Militarys Strategic Thinking Since 2001: Implications for the Deterrence Stability of South Asia.

The Indo-Pak relationship has always been marred by many conflicts and unresolved issues. Both states fought three major wars and a limited skirmish since their independence. The Indian strategic thinking during 1980s focused on deeper thrusts and aimed to cut Pakistan into two. But after the nuclearization of south Asia, India brought shift in their strategic thinking and employed aggressive policies. The study aims to highlight the post 2001 change in the Indian military’s strategic thinking and its likely impact on the deterrence stability of South Asia. The study qualifies in the Descriptive, Exploratory and Predictive data analysis approaches. Both primary and secondary data was used to investigate and elaborate different aspects of the study. The study conducted in-depth interviews of Pakistani, Indian and Western retired military officers, diplomats, academicians with expertise in strategic studies. This thesis is divided in four parts. First part set the theoretical base of the study and focused on the realist school of thought and its relevance with the Indian strategic thinking. Second part of the study discussed the doctrinal shift from Sunderji doctrine to Cold Start Doctrine & proactive military operations after 2004, which forced Pakistan to develop battlefield nuclear weapons in 2011 to balance the conventional asymmetries and deter any shallow maneuvers by the Indian military. After their failure to execute CSD, the Indian military came up with the idea of sub- conventional warfare operations- (surgical strikes) in 2012 which later got an endorsement by the Joint Armed Forces Doctrine of 2017, to take out alleged militant groups and their sanctuaries behind the enemy lines. It appears that the Indian policy makers are convinced that the option of ‘surgical strike’ is acceptable at global level and good for local electorates. All these direct military operations entail dangerous implications for the regional security. Therefore, to avoid risk of escalation in case of any limited conventional war, the Indian military employed ‘the hybrid warfare strategy’ to tackle Pakistan problem. The hybrid warfare entails regular and irregular covert operations in which the Indian military is capitalizing on Pakistan’s socio-economic, ethno-religious and geo-political vulnerabilities. This mode of warfare has been very successful for India because Pakistan have suffered more losses than any direct armed conflict with India. Third, part of the study highlighted the Indian military’s modernization and operationalization aspects. In this part, the study has discussed the Indian military’s acquisition of sophisticated weaponry and how it is going to create conventional asymmetries in South Asia. The second part of this chapter dealt with the operational side, in which the study discussed the Indian military’s several wargames since 2004 in which they practiced and validated their limited war concepts, cut short mobilization time, improved logistics, conducted joint operations for synergy & integration, offensive maneuvers and night vision capabilities in a Network Centric & Electronic Warfare environment. The last part of the dissertation highlighted the implications of the Indian military’s strategic thinking on the deterrence stability of south Asia. This part of the study deliberated in detail on the issues of conventional disparity, possibility of a limited war/surgical strikes & escalation aspects. Moreover, the issue of battlefield nuclear weapons, associated risks of command & control, inadvertent use, accident, lose it or use it dilemma and the possibility of preemptive strike by the Indian military has been covered in detail. The study concludes on these findings that the Indian military’s doctrinal shift and massive military modernization would force Pakistan to improve its own conventional and nuclear capabilities. However, the risk of limited war under the nuclear umbrella cannot be ruled out. Pakistan needs to improve its conventional deterrence to make it costly any misadventure by India. The prospects of direct military confrontation between India and Pakistan would decrease with an effective conventional answer by Pakistan. The study argues that, the hybrid warfare strategy has been more successful as compared to direct military engagement. Therefore, it is expected that this trend would continue unless Pakistan overcomes its political, socio-economic and ethno-religious vulnerabilities. The study determines that India and Pakistan cannot win against each other in any direct or indirect military confrontation, however it is advisable that both states must overcome their differences, resolve outstanding issues through consistent dialogue process in an amicable way for the long term peace and stability of South Asia.