Is TabPFN the Silver Bullet for Insurance Pricing?

Bruno Deprez, Wouter Verbeke and Tim Verdonck

Papers from arXiv.org

Abstract: Modelling claim frequency and severity for non-life insurance pricing predominantly relies on generalised linear models (GLMs), with gradient-boosted machines as the leading machine learning alternative. Tabular foundation models (TFMs) present a fundamentally different inference paradigm. By pre-training on large collections of synthetic datasets, TFMs enable inference on new data through in-context learning, without any dataset-specific preprocessing, fitting, or hyperparameter tuning. This paper presents a first empirical evaluation of TabPFN for motor insurance pricing, benchmarking two versions of TabPFN against GLM and XGBoost on two publicly available motor third-party liability (MTPL) datasets. Our results show that TabPFN does not consistently outperform established baselines: it falls behind the GLM on claim frequency, where its performance depends on the size of the in-context training set, but it is competitive on claim severity, where data are scarcer. Its inference times are substantially longer. Although tabular foundation models are promising, particularly in data-scarce settings, TabPFN is not yet ready to replace established actuarial methods for claim frequency.

Date: 2026-05, Revised 2026-10
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