Template-type: ReDIF-Paper 1.0
Author-Name: Zuleyca Díaz Martínez 
Author-Email: zuleyka@ccee.ucm.es
Author-Workplace-Name: Departamento de Economía Financiera y Contabilidad I (Economía Financiera y Actuarial).Universidad Complutense de 
	Madrid.
Author-Workplace-Homepage:
 https://www.ucm.es/economia-financiera-y-actuarial
Author-Name: José Fernández Menéndez  
Author-Email: jfernan@ccee.ucm.es
Author-Workplace-Name: Departamento de Organización de Empresas. Universidad Complutense de Madrid.
Author-Workplace-Homepage:
 https://www.ucm.es//departamento-de-organizacion-de-empresas-y-marketing
Author-Name: María Jesús Segovia Vargas 
Author-Workplace-Name: Departamento de Economía Financiera y Contabilidad I (Economía Financiera y Actuarial).Universidad Complutense de 
	Madrid.
Author-Workplace-Homepage:
 https://www.ucm.es/economia-financiera-y-actuarial
Title: See5 Algorithm versus Discriminant Analysis. An Application to the Prediction of Insolvency in Spanish Non-life Insurance 
	Companies 
Abstract:Prediction of insurance companies insolvency has arised as an important problem in the field of financial research, due to the 
	necessity of protecting the general public whilst minimizing the costs associated to this problem.  Most methods applied in the 
	past to tackle this question are traditional statistical techniques which use financial ratios as explicative variables. However, 
	these variables do not usually satisfy statistical assumptions, what complicates the application of the mentioned methods.In this 
	paper, a comparative study of the performance of a well-known parametric statistical technique (Linear Discriminant Analysis) 
	and a non-parametric machine learning technique (See5) is carried out. We have applied the two methods to the problem of the 
	prediction of insolvency of Spanish non-life insurance companies upon the basis of a set of financial ratios.  Results indicate 
	a higher performance of the machine learning technique, what shows that this method can be a useful tool to evaluate insolvency 
	of insurance firms.
Keywords: Insolvency, Insurance Companies, Discriminant Analysis, See5.
Length: 21 pages

Creation-Date: 2004 
Number: 04-12
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/doctra04-12.txt
File-URL: https://eprints.ucm.es/id/eprint/6836/1/0412.pdf
File-Format: Application/pdf
Handle: RePEc:ucm:doctra:04-12