Patent ID: 8340945

Claim:
A computer-implemented method for performing joint modeling of a mean and dispersion of ungrouped insurance data of high cardinality in an insurance industry, the method comprising: deriving a loss function characterized over the data taking into account distributional details of the ungrouped insurance data; representing regression functions for the mean and the dispersion as stagewise expansion forms, the stagewise expansion forms including undetermined scalar coefficients and undetermined basis functions; determining the basis functions that maximally correlate with a corresponding steepest-descent gradient direction of the derived loss function; obtaining the scalar coefficients based on a single step of multi-dimensional Newton iteration involving a matrix calculation; modifying parameters used for the obtaining the scalar coefficients; and making the single step of the multi-dimensional Newton iteration be the corresponding steep-descent gradient direction for the obtained scalar coefficients; completing the regression functions based on the determined basis functions and obtained scalar coefficients; concurrently estimating the mean and the dispersion by using the completed regression functions, wherein the deriving, the representing, the determining, the obtaining, the modifying, the making, the completing, and concurrently estimating are carried out without grouping the ungrouped insurance data, wherein a processor coupled to a memory device performs the deriving, the representing, the determining, the obtaining, the modifying, the making, the completing, and concurrently estimating.