Improving Automobile Insurance Ratemaking Using Telematics: Incorporating Mileage and Driver Behaviour Data

Improving automobile insurance ratemaking using telematics: incorporating mileage and driver behaviour data

We show how data collected from a GPS device can be incorporated in motor insurance ratemaking. The calculation of premium rates based upon driver behaviour represents an opportunity for the insurance sector. Our approach is based on count data regression models for frequency, where exposure is driven by the distance travelled and additional parameters that capture characteristics of automobile...

Statistical Learning Algorithms Applied to Automobile Insurance Ratemaking

We recently conducted a research project for a large North American automobile insurer. This study was the most exhaustive ever undertaken by this particular insurer and lasted over an entire year. We analyzed the discriminating power of each variable used for ratemaking. We analyzed the performance of several models within five broad categories: linear regressions, generalized linear models, d...

General Insurance Deductible Ratemaking

Insurance claims have deductibles, which must be considered when pricing for insurance premium. Deductibles may cause censoring and truncation to the frequencies, severities, and peril types of observed insurance claims. In practice, the regression approach is often used with deductible amount included as an explanatory variable inside a frequency-severity model, so that the resulting coefficie...

Digital Insurance Telematics Solution_Brochure_A4_240117.cdr

Automobile Driver Fingerprinting

Today’s automobiles leverage powerful sensors and embedded computers to optimize efficiency, safety, and driver engagement. However the complexity of possible inferences using in-car sensor data is not well understood. While we do not know of attempts by automotive manufacturers or makers of after-market components (like insurance dongles) to violate privacy, a key question we ask is: could the...