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“The transition towards semi-autonomous vehicle insurance: the contribution of usage-based data”

Author

Listed:
  • Montserrat Guillen

    (Riskcenter- IREA and Department of Econometrics, University of Barcelona, Av. Diagonal, 690, 08034. Barcelona, Spain)

  • Ana M. Pérez-Marín

    (Riskcenter- IREA and Department of Econometrics, University of Barcelona, Av. Diagonal, 690, 08034. Barcelona, Spain)

Abstract

The use of advanced driver assistance systems and the transition towards semi-autonomous vehicles are expected to contribute to a lower frequency of motor accidents and to have a significant impact for the automobile insurance industry, as rating methods must be revised to ensure that risks are correctly measured. We analyze telematics information and usagebased insurance research to identify the effect of driving patterns on the risk of accident. This is used as a starting point for addressing risk quantification and safety for vehicles than can control speed. Here we estimate the effect of excess speed on the risk of accidents with a real telematics data set. We show scenarios for a reduction of speed limit violations and the consequent decrease in the expected number of accident claims. If excess speed could be eliminated, then the expected number of accident claims could be reduced to half of its initial value, applying the average conditions of our data. As a consequence, insurance premiums also diminish.

Suggested Citation

  • Montserrat Guillen & Ana M. Pérez-Marín, 2018. "“The transition towards semi-autonomous vehicle insurance: the contribution of usage-based data”," IREA Working Papers 201811, University of Barcelona, Research Institute of Applied Economics, revised May 2018.
    • Handle: RePEc:ira:wpaper:201811
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    References listed on IDEAS

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    1. Paefgen, Johannes & Staake, Thorsten & Fleisch, Elgar, 2014. "Multivariate exposure modeling of accident risk: Insights from Pay-as-you-drive insurance data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 61(C), pages 27-40.
    2. Lemaire, Jean & Park, Sojung Carol & Wang, Kili C., 2016. "The Use Of Annual Mileage As A Rating Variable," ASTIN Bulletin, Cambridge University Press, vol. 46(1), pages 39-69, January.
    3. J. Piao & M. McDonald, 2008. "Advanced Driver Assistance Systems from Autonomous to Cooperative Approach," Transport Reviews, Taylor & Francis Journals, vol. 28(5), pages 659-684, February.
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    More about this item

    Keywords

    Usage-based-insurance; ratemaking; semi-autonomous vehicles; advanced driver assistance systems. JEL classification:G22.;
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