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 pre...

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Detalles Bibliográficos
Autores: Guillén, Montserrat, Nielsen, Jens Perch, Ayuso, Mercedes, Pérez Marín, Ana María
Tipo de recurso: artículo
Estado:Versión aceptada para publicación
Fecha de publicación:2019
País:España
Institución:Universidad de Barcelona
Repositorio:Dipòsit Digital de la UB
OAI Identifier:oai:diposit.ub.edu:2445/130383
Acceso en línea:https://hdl.handle.net/2445/130383
Access Level:acceso abierto
Palabra clave:Risc (Assegurances)
Primes (Assegurances)
Anàlisi de variància
Telemàtica
Risk (Insurance)
Insurance premiums
Analysis of variance
Telematics
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spelling The use of telematics devices to improve automobile insurance ratesGuillén, MontserratNielsen, Jens PerchAyuso, MercedesPérez Marín, Ana MaríaRisc (Assegurances)Primes (Assegurances)Anàlisi de variànciaTelemàticaRisk (Insurance)Insurance premiumsAnalysis of varianceTelematicsMost 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.Wiley2019info:eu-repo/semantics/articleinfo:eu-repo/semantics/acceptedVersionapplication/pdfhttps://hdl.handle.net/2445/130383Articles publicats en revistes (Econometria, Estadística i Economia Aplicada)reponame:Dipòsit Digital de la UBinstname:Universidad de BarcelonaInglésVersió postprint del document publicat a: https://doi.org/10.1111/risa.13172Risk Analysis, 2019, vol. 39, num. 3, p. 662-672https://doi.org/10.1111/risa.13172(c) Society for Risk Analysis, 2019info:eu-repo/semantics/openAccessoai:diposit.ub.edu:2445/1303832026-05-27T06:46:51Z
dc.title.none.fl_str_mv The use of telematics devices to improve automobile insurance rates
title The use of telematics devices to improve automobile insurance rates
spellingShingle The use of telematics devices to improve automobile insurance rates
Guillén, Montserrat
Risc (Assegurances)
Primes (Assegurances)
Anàlisi de variància
Telemàtica
Risk (Insurance)
Insurance premiums
Analysis of variance
Telematics
title_short The use of telematics devices to improve automobile insurance rates
title_full The use of telematics devices to improve automobile insurance rates
title_fullStr The use of telematics devices to improve automobile insurance rates
title_full_unstemmed The use of telematics devices to improve automobile insurance rates
title_sort The use of telematics devices to improve automobile insurance rates
dc.creator.none.fl_str_mv Guillén, Montserrat
Nielsen, Jens Perch
Ayuso, Mercedes
Pérez Marín, Ana María
author Guillén, Montserrat
author_facet Guillén, Montserrat
Nielsen, Jens Perch
Ayuso, Mercedes
Pérez Marín, Ana María
author_role author
author2 Nielsen, Jens Perch
Ayuso, Mercedes
Pérez Marín, Ana María
author2_role author
author
author
dc.subject.none.fl_str_mv Risc (Assegurances)
Primes (Assegurances)
Anàlisi de variància
Telemàtica
Risk (Insurance)
Insurance premiums
Analysis of variance
Telematics
topic Risc (Assegurances)
Primes (Assegurances)
Anàlisi de variància
Telemàtica
Risk (Insurance)
Insurance premiums
Analysis of variance
Telematics
description 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.
publishDate 2019
dc.date.none.fl_str_mv 2019
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/acceptedVersion
format article
status_str acceptedVersion
dc.identifier.none.fl_str_mv https://hdl.handle.net/2445/130383
url https://hdl.handle.net/2445/130383
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Versió postprint del document publicat a: https://doi.org/10.1111/risa.13172
Risk Analysis, 2019, vol. 39, num. 3, p. 662-672
https://doi.org/10.1111/risa.13172
dc.rights.none.fl_str_mv (c) Society for Risk Analysis, 2019
info:eu-repo/semantics/openAccess
rights_invalid_str_mv (c) Society for Risk Analysis, 2019
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Wiley
publisher.none.fl_str_mv Wiley
dc.source.none.fl_str_mv Articles publicats en revistes (Econometria, Estadística i Economia Aplicada)
reponame:Dipòsit Digital de la UB
instname:Universidad de Barcelona
instname_str Universidad de Barcelona
reponame_str Dipòsit Digital de la UB
collection Dipòsit Digital de la UB
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15,300724

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