I was struck by an article on Insurance and Technology titled All Predictive Models Are Wrong. Now, while this is a true statement (more or less) it reminds me of a famous Winston Churchil quote:
It has been said that democracy is the worst form of government except all the others that have been tried.
In other words I think that predictive models are wrong but they are better than other approaches. They are less prone to racism, sexism and other isms. They can take into account many more factors than a human decision maker. They can and do improve decision making.
So don’t be put off – predictive analytics can help but, like any technology, you need to remember their limitations.
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There is an old quote:
All models are wrong but some are useful.
If they help and you understand your limitations, what’s wrong with that??