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Can Automobile Insurance Telematics Predict the Risk of Near-Miss Events?

Author

Listed:
  • Montserrat Guillen
  • Jens Perch Nielsen
  • Ana M. Pérez-Marín
  • Valandis Elpidorou

Abstract

Telematics data from usage-based motor insurance provide valuable information – including vehicle usage, attitude toward speeding, and time and proportion of urban/nonurban driving, which can be used for ratemaking. Additional information on acceleration, braking, and cornering can likewise be usefully employed to identify near-miss events, a concept taken from aviation that denotes a situation that might have resulted in an accident. We analyze near-miss events from a sample of drivers in order to identify the risk factors associated with a higher risk of near-miss occurrence. Our empirical application with a pilot sample of real usage-based insurance data reveals that certain factors are associated with a higher expected number of near-miss events, but that the association differs depending on the type of near miss. We conclude that nighttime driving is associated with a lower risk of cornering events, urban driving increases the risk of braking events, and speeding is associated with acceleration events. These results are relevant for the insurance industry in order to implement dynamic risk monitoring through telematics, as well as preventive actions.

Suggested Citation

  • Montserrat Guillen & Jens Perch Nielsen & Ana M. Pérez-Marín & Valandis Elpidorou, 2020. "Can Automobile Insurance Telematics Predict the Risk of Near-Miss Events?," North American Actuarial Journal, Taylor & Francis Journals, vol. 24(1), pages 141-152, January.
    • Handle: RePEc:taf:uaajxx:v:24:y:2020:i:1:p:141-152
    DOI: 10.1080/10920277.2019.1627221
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    Citations

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    Cited by:

    1. Shengkun Xie & Kun Shi, 2023. "Generalised Additive Modelling of Auto Insurance Data with Territory Design: A Rate Regulation Perspective," Mathematics, MDPI, vol. 11(2), pages 1-24, January.
    2. Xenxo Vidal-Llana & Carlos Salort Sánchez & Vincenzo Coia & Montserrat Guillen, 2022. ""Non-Crossing Dual Neural Network: Joint Value at Risk and Conditional Tail Expectation estimations with non-crossing conditions"," IREA Working Papers 202215, University of Barcelona, Research Institute of Applied Economics, revised Oct 2022.
    3. Montserrat Guillen & Jens Perch Nielsen & Ana M. Pérez‐Marín, 2021. "Near‐miss telematics in motor insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(3), pages 569-589, September.
    4. Simon, Pierre-Alexandre & Trufin, Julien & Denuit, Michel, 2023. "Bivariate Poisson credibility model and bonus-malus scale for claim and near-claim events," LIDAM Discussion Papers ISBA 2023014, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    5. Zhiyu Quan & Changyue Hu & Panyi Dong & Emiliano A. Valdez, 2024. "Improving Business Insurance Loss Models by Leveraging InsurTech Innovation," Papers 2401.16723, arXiv.org.
    6. You-Shyang Chen & Chien-Ku Lin & Yu-Sheng Lin & Su-Fen Chen & Huei-Hua Tsao, 2022. "Identification of Potential Valid Clients for a Sustainable Insurance Policy Using an Advanced Mixed Classification Model," Sustainability, MDPI, vol. 14(7), pages 1-22, March.
    7. Gao, Lisa & Shi, Peng, 2022. "Leveraging high-resolution weather information to predict hail damage claims: A spatial point process for replicated point patterns," Insurance: Mathematics and Economics, Elsevier, vol. 107(C), pages 161-179.
    8. Banghee So & Jean-Philippe Boucher & Emiliano A. Valdez, 2021. "Synthetic Dataset Generation of Driver Telematics," Risks, MDPI, vol. 9(4), pages 1-19, March.
    9. Francis Duval & Jean‐Philippe Boucher & Mathieu Pigeon, 2023. "Enhancing claim classification with feature extraction from anomaly‐detection‐derived routine and peculiarity profiles," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 90(2), pages 421-458, June.
    10. Farha Usman & Jennifer S. K. Chan & Udi E. Makov & Yang Wang & Alice X. D. Dong, 2024. "Claim Prediction and Premium Pricing for Telematics Auto Insurance Data Using Poisson Regression with Lasso Regularisation," Risks, MDPI, vol. 12(9), pages 1-33, August.
    11. Vikas Chauhan & Rohit Joshi & Vipin Choudhary, 2024. "Understanding intention to adopt telematics-based automobile insurance in an emerging economy: a mixed-method approach," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 1017-1036, September.

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