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A statistical model for payments with a payment limit

At Posthuma Partners, we developed a statistical model for payments with a payment limit. Think, for example, about car insurance: the insurer pays out no more than the value of the car. This new model improves the prediction accuracy up to 30%. The figure below shows that: predicted payments above the payment limit for the original model (open bars), versus predicted payments limited by the payment limit for the new model (green bars). Well done by our statistics team!

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