Date of Completion

Spring 5-1-2018

Thesis Advisor(s)

Patricia Teufel

Honors Major

Mathematics/Actuarial Science


Business Analytics | Insurance


Insurance has been constantly evolving since its inception; nowadays, insurance has become an indispensable part of people’s daily life. Nonetheless, very few individuals understand the mechanism behind their insurance coverage. This paper focuses on the evolution of personal auto insurances. The first part of the paper summarizes traditional pricing techniques for personal auto insurance and discusses their deficiencies. The second part of the paper introduces telematics insurance, an innovative form of auto insurance. This new kind of insurance integrates telematics as well as other technologies in the premium calculation process. The study proceeds to evaluate the pros and cons of telematics insurance for both the insurers and the insureds. The paper then explores the likely evolution of personal auto telematics insurance, including the devices used to capture and transmit relevant data, customers’ attitudes toward this product, potential insurer enhancements and possible new regulations. In my view, telematics insurance has a promising future, although increased regulation may be needed to address certain concerns.

The research analyzes real data collected from credible agencies such as the National Highway Traffic Safety Administration (NHTSA) and Willis Towers Watson as well as interviews with insurance representatives from several insurance carriers who offer telematics insurance to reach its conclusion.