Project CEMAPRE internal
| Title | Estimating the effects of technology advancement on pricing automobile insurance |
| Participants | Renata Alcoforado, Agnieszka Bergel, Corina Constantinescu, Alfredo Egídio dos Reis (Principal Investigator), Véronique Maume-Deschamps, Weihong Ni, Eugenio Rodriguez Martinez |
| Summary | With a focus in the context of automobile insurance, this project would like to look at the current status of insurance industry in terms of uncertainties and identified issues brought by recent development of technologies. On the one hand, we try to start from a relatively neutral perspective against the uncertainties embedded with unfamiliar/innovative policies. By making dynamic adjustment of premiums based upon claim records stemming from these policies thanks to the features in a Bonus-Malus System (BMS), we believe the model not only promotes an initial competitive market position for an insurer but also ensures the control of the risks. On the other hand, there are several identified issues related to recent technology advancement that have affected people's driving behaviours, e.g. the use of mobile phones according to the U.S. Department of Transportation. To quantitatively evaluate risks associated with a certain human habit is believed to facilitate an insurer's risk management strategies as well as pricing an insurance product and that will be the second concentration in this proposed project. |