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How to Tell If You Should Trust Your Statistical Models

Harvard Business Review

For example, developing a credit scoring model using data of past defaults and then testing the model on that same data is an exercise in circularity: you’re predicting what you’ve explained already. Decision making Information & technology' So make sure that your analysts apply the model to fresh data in new contexts.

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Three Questions to Ask Your Advanced-Analytics Team

Harvard Business Review

For insurers, transforming these data into their most usable form may require the creation of new composite variables or scores from the existing data — something like a driving risk score that gives weight to telematics data, geography, and credit score.