Tree-like pairwise interaction networks

Abstract Modeling feature interactions in tabular data remains a key challenge in predictive modeling, for example, as used for insurance pricing. This paper proposes the tree-like pairwise interaction network (PIN), a novel neural network architecture that explicitly captures pairwise feature interactions through a shared feed-forward neural network architecture that mimics the structure of decision trees. PIN enables intrinsic interpretability by design, allowing for direct inspection of interaction effects. Moreover, it allows for efficient SHapley’s Additive exPlanation computations because it only involves pairwise interactions. We highlight connections between PIN and established models such as GA squared 2 $^{2}$ Ms, gradient boosting machines, and graph neural networks. Empirical results on the popular French motor insurance dataset show that PIN outperforms both traditional and modern neural network benchmarks in predictive accuracy, while also providing insight into how features interact with each another and how they contribute to the predictions.