Semi-autonomous vehicles: Usage-based data evidences of what could be expected from eliminating speed limit violations

Pricing weekly motor insurance drivers' with behavioral and contextual telematics data

Telematics boxes integrated into vehicles are instrumental in capturing driving data encompassing behavioral and contextual information, including speed, distance travelled by road type, and time of day. These data can be amalgamated with drivers' individual attributes and reported accident occurrences to their respective insurance providers. Our study analyzes a substantial sample size of 19,214 individual drivers over a span of 55 weeks, covering a cumulative distance of 181.4 million kilometers driven. Utilizing this dataset, we develop predictive models for weekly accident frequency. As anticipated based on prior research with yearly data, our findings affirm that behavioral traits, such as instances of excessive speed, and contextual data pertaining to road type and time of day significantly aid in ratemaking design. The predictive models enable the creation of driving scores and personalized warnings, presenting a potential to enhance traffic safety by alerting drivers to perilous conditions. Our discussion delves into the construction of multiplicative scores derived from Poisson regression, contrasting them with additive scores resulting from a linear probability model approach, which offer greater communicability. Furthermore, we demonstrate that the inclusion of lagged behavioral and contextual factors not only enhances prediction accuracy but also lays the foundation for a diverse range of usage-based insurance schemes for weekly payments.

Safety assessment of trucks based on GPS and in-vehicle monitoring data

Increasingly, drivers are choosing to buy usage-based automobile insurance (UBI). Manage-how-you-drive (MHYD) insurance, a new type of UBI, incorporates active safety management to monitor driver behavior and issue warnings as needed. While researchers have introduced telematics data into automobile insurance pricing, the specific effect of in-vehicle active safety management on driver risk assessment has been neglected, especially for truck drivers, whose crashes have more serious consequences. This study uses telematics and in-vehicle monitoring features to examine the key factors underlying large commercial truck crashes, and quantifies the effect of these factors on crash risk. Data from 2,185 trucks in Shanghai, China, were collected for a total of 105,786 trips and 465,555 in-vehicle warnings to investigate three types of factors affecting risk: travel characteristics, driving behavior, and in-vehicle warnings. A zero-inflated Poisson (ZIP) regression model was built, and a ZIP model without the warning variables as well as a basic Poisson model with warnings were considered for comparison. It was found that the ZIP model considering in-vehicle warning information performed significantly better than the other models. The standardized regression coefficient method was used to identify the most important variables. In-vehicle yawn and smoking warnings had significantly more association with the number of crashes than did the travel characteristics and driving behavior variables, though freeway distance traveled, average freeway speed, percentage of trips on sunny days, and percentage of trips at night also correlated significantly with crash risk. These results can provide a reference for UBI insurance professionals considering in-vehicle active safety management, as well as support freight companies in drafting appropriate working regulations.

Percentile charts for speeding based on telematics information

Reference charts are widely used as a graphical tool for assessing and monitoring children's growth given gender and age. Here, we propose a similar approach to the assessment of driving risk. Based on telematics data, and using quantile regression models, our methodology estimates the percentiles of the distance driven at speeds above the legal limit depending on drivers' characteristics and the journeys made. We refer to the resulting graphs as percentile charts for speeding and illustrate their use for a sample of drivers with Pay-How-You-Drive insurance policies. We find that percentiles of distance driven at excessive speeds depend mainly on total distance driven, the percentage of driving in urban areas and the driver's gender. However, the impact on the estimated percentile for these covariates is not constant. We conclude that the heterogeneity in the risk of driving long distances above the speed limit can be easily represented using reference charts and that, conversely, individual drivers can be scored by calculating an estimated percentile for their specific case. The dynamics of this risk score can be assessed by recording drivers as they accumulate driving experience and cover more kilometres. Our methodology should be useful for accident prevention and, in the context of Manage-How-You-Drive insurance, reference charts can provide real-time alerts and enhance recommendations for ensuring safety.

Bivariate Mixed Poisson and Normal Generalised Linear Models with Sarmanov Dependence—An Application to Model Claim Frequency and Optimal Transformed Average Severity

The aim of this paper is to introduce dependence between the claim frequency and the average severity of a policyholder or of an insurance portfolio using a bivariate Sarmanov distribution, that allows to join variables of different types and with different distributions, thus being a good candidate for modeling the dependence between the two previously mentioned random variables. To model the claim frequency, a generalized linear model based on a mixed Poisson distribution -like for example, the Negative Binomial (NB), usually works. However, finding a distribution for the claim severity is not that easy. In practice, the Lognormal distribution fits well in many cases. Since the natural logarithm of a Lognormal variable is Normal distributed, this relation is generalised using the Box-Cox transformation to model the average claim severity. Therefore, we propose a bivariate Sarmanov model having as marginals a Negative Binomial and a Normal Generalized Linear Models (GLMs), also depending on the parameters of the Box-Cox transformation. We apply this model to the analysis of the frequency-severity bivariate distribution associated to a pay-as-you-drive motor insurance portfolio with explanatory telematic variables.

A Sarmanov Distribution with Beta Marginals: An Application to Motor Insurance Pricing

Background: The Beta distribution is useful for fitting variables that measure a probability or a relative frequency. Methods: We propose a Sarmanov distribution with Beta marginals specified as generalised linear models. We analyse its theoretical properties and its dependence limits. Results: We use a real motor insurance sample of drivers and analyse the percentage of kilometres driven above the posted speed limit and the percentage of kilometres driven at night, together with some additional covariates. We fit a Beta model for the marginals of the bivariate Sarmanov distribution. Conclusions: We find negative dependence in the high quantiles indicating that excess speed and night-time driving are not uniformly correlated.

Assessing Driving Risk Using Internet of Vehicles Data: An Analysis Based on Generalized Linear Models

With the major advances made in internet of vehicles (IoV) technology in recent years, usage-based insurance (UBI) products have emerged to meet market needs. Such products, however, critically depend on driving risk identification and driver classification. Here, ordinary least square and binary logistic regressions are used to calculate a driving risk score on short-term IoV data without accidents and claims. Specifically, the regression results reveal a positive relationship between driving speed, braking times, revolutions per minute and the position of the accelerator pedal. Different classes of risk drivers can thus be identified. This study stresses both the importance and feasibility of using sensor data for driving risk analysis and discusses the implications for traffic safety and motor insurance.

Risk factors of road accident severity and the development of a new system for prevention: New insights from China

Road accident fatalities and accident severity costs have become top priorities and concerns for Chinese policymakers. Understanding the principal factors that explain accident severity is considered to be the first step towards the adequate design of an accident prevention strategy. In this paper, we examine the contribution of various types of factors (vehicle, driver and others) in explaining accident severity in China. Unlike previous studies, the analysis gives a particular focus on fatal accidents. Using a large sample of 405,177 observations for 4-wheeled vehicles in the year 2017 and various statistical and econometrics approaches (e.g., OLS, quantile regression and extreme value theory), the results show that the factors explaining the severity of accidents differs significantly between normal and extreme severity accidents, e.g. across quantiles. Interestingly, we find that the gender factor is only significant for fatal accidents. In particular, the analysis shows that male drivers have an increased likelihood of extreme risk taking. On the basis of these empirical findings, a new ratemaking approach that aims to improve road safety and prevention is discussed and proposed.

A geographically weighted regression to estimate the comprehensive cost of traffic crashes at a zonal level

Global road safety records demonstrate spatial variation of comprehensive cost of traffic crashes across countries. To the best of our knowledge, no study has explored the variation of this matter at a local geographical level. This study proposes a method to estimate the comprehensive crash cost at the zonal level by using person-injury cost. The current metric of road safety attributes safety to the location of the crash, which makes it challenging to assign the crash cost to home-location of the individuals who were involved in traffic crashes. To overcome this limitation, we defined Home-Based Approach crash frequency as the expected number of crashes by severity that road users who live in a certain geographic area have during a specified period. Using crash data from Tennessee, we assign those involved in traffic crashes to the census tract corresponding to their home address. The average Comprehensive Crash Cost at the Zonal Level (CCCAZ) for the period of the study was $18.2 million (2018 dollars). Poisson and Geographically Weighted Poisson Regression (GWPR) models were used to analyzing the data. The GWPR model was more suitable compared to the global model to address spatial heterogeneity. Findings indicate population of people over 60-years-old, the proportion of residents that use non-motorized transportation, household income, population density, household size, and metropolitan indicator have a negative association with CCCAZ. Alternatively, VMT, vehicle per capita, percent educated over 25-year-old, population under 16-year-old, and proportion of non-white races and individuals who use a motorcycle as their commute mode have a positive association with CCCAZ. Findings are discussed in line with road safety literature.

The Use of Telematics Devices to Improve Automobile Insurance Rates

Most automobile insurance databases contain a large number of policyholders with zero claims. This high frequency of zeros may reflect the fact that some insureds make little use of their vehicle, or that they do not wish to make a claim for small accidents in order to avoid an increase in their premium, but it might also be because of good driving. We analyze information on exposure to risk and driving habits using telematics data from a pay-as-you-drive sample of insureds. We include distance traveled per year as part of an offset in a zero-inflated Poisson model to predict the excess of zeros. We show the existence of a learning effect for large values of distance traveled, so that longer driving should result in higher premiums, but there should be a discount for drivers who accumulate longer distances over time due to the increased proportion of zero claims. We confirm that speed limit violations and driving in urban areas increase the expected number of accident claims. We discuss how telematics information can be used to design better insurance and to improve traffic safety.