Faculty Advisor

Abraham, Jonathan P.

Faculty Advisor

Heinricher, Arthur C.

Abstract

This project studied the new assigned risk plan for Massachusetts automobile insurance. The current method is a simple lottery in which each company's voluntary market share determines its probability of receiving the next high-risk driver. Results show that a dynamic method that adjusts assignment probabilities according to each company's current residual market share can reduce volatility costs by 50% for all insurance companies in the state.

Publisher

Worcester Polytechnic Institute

Date Accepted

January 2005

Major

Actuarial Mathematics

Project Type

Major Qualifying Project

Accessibility

Restricted-WPI community only

Advisor Department

Mathematical Sciences

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