Boison-PersonalAutoSymbolRating.ppt

Farm Bureau Actuaries Conference

Personal Auto Symbol Rating

Yesterday, Today and Tomorrow

Yesterday

Based upon MSRP. Applied only to 1st party property coverages. Same Symbol for both Comprehensive and

Collision. Combined with “Age” as opposed to “Model

Year” Rating.

Yesterday

Late 70’s 2 significant changes Introduction of Model Year Rating Introduction of Damageability/Repairability into

Symbol

Age vs. Model year

Age FactorModel Year Factor

    X + 2 (1.05)(1.05)

    X + 1 1.05

1 1.00 X 1.00

2,3 0.85 X - 1 0.95

4,5 0.75 X - 2 0.90

6 & over 0.65  X - 3  0.85

Model Year Rating

Eliminated yearly fluctuations between rates. Created significant premium trend.

o as new cars rated higher and older cars did not decrease – given high inflation this relieved pressure on regulators re approving large rate increases

Created a mechanism by which individual vehicle model years could be recognized – never really utilized.

Damageability/Repairability Rating Companies began to introduce the actual

vehicles experience into symbol rating for Comp and Collision.

Use of Industry Statistics together with HLDI analyses to measure differences between vehicles.

ISO program “up and down symboled” vehicles up to 3 symbol change.

Today

Separate Comp vs. Collision rating. Added Liability and 1st party Medical Rating.

Problems with Current System

Many companies (incl. ISO) don’t differentiate between Comp and Collision.

Liability Symbols are just beginning to be implemented.

Problems with Current System (cont.) The ability to use Model Year effectively

together with specific models has not been realized. E.G. If the 1995 Saturn SL has the highest theft

rate as recently published – shouldn’t it have a higher rate than the later models?

Companies do not use multi-variate techniques to eliminate interdependencies in their rating/tiering plans (2 dr. vs. 4 dr.).

Problems with Current System (cont.) New Vehicles are usually rated by

“comparison to similar” existing vehicle – becoming greater problem as new vehicle type are being introduced.

New ISO Liability Rating

2-way GLM analysis using combination of curb weight and chassis type (although manufacturer had highest r2).

For liability – curb weight indications are different depending on chassis type – somewhat counterintuitive. Frame – predicted relativity increases as weight

increases. UniBody - predicted relativity decreases as weight

increases.

New ISO Liability Rating

First Party Coverages - predicted relativity always decreases as weight increases.

Since data used was 1997 – 2001 vehicles, minimal data for Unibody > 5,250 lb.

Thus curbweight capped at 5,250 lb.

New ISO Liability Rating

New Vehicles Only Model Years 1996 – 2001 evaluated. Will review LPMP every 2 years. Will not change LPMP on annual basis e.g.

October 1. LPMP symbol manual pages are not Model Year

specific and do not include vehicle Model Year references except 2001 as earliest and certain new model types.

New ISO Liability Rating

New Vehicle Types Relativities for new vehicle series will be

determined by giving 50% weight to the predicted loss ratio relativity (based on chassis type and curb weight) and 50% weight to 1.00. (Note: Curb weights for Unibody vehicles will be capped at 5,250 pounds).

New ISO Liability Rating

New Vehicle Types (con’t) For 2002-2004 new vehicles - like vehicle series

adjustments have not been applied. Nor will such adjustments be applied on a prospective basis for new vehicles in the LPMP Vehicle Rating Plan. That is, adjustments to ensure consistent treatment of like vehicles will not be made for any vehicles until historical insurance experience for such vehicles is available for analysis.

Liability Symbols

Is this really so new?

04/07/23 19

Vehicle Rating

CAS Spring Meeting

MAY 18, 2004

Dan Charbonneau

Allstate Insurance Company

Allstate Insurance Company

OVERVIEW OF EGR (Experience Group Rating)

Designed to improve upon the symbol adjustment process

•Vehicle experience determines if symbol is adjusted up or down

• Adjustment based on combined Collision/Comprehensive experience

• Limited to full symbol adjustments

Allstate Insurance Company

OVERVIEW OF EGR

How EGR Differs

• Treats cost new symbol as fixed starting point, applies an additional factor to

vehicle based on its experience

• Allows factors to vary in continuous manner rather than by full symbols

• Collision and Comp can be rated independently

• Liability coverages can be rated

• Initial rating for brand new vehicles based on like vehicles

History

• First implemented in 1999 for MY2000 vehicles

• New set of factors developed for each subsequent model year

Allstate Insurance Company

METHODOLOGY

Data: CountrywideSummarized by year, coverage,vehicle and model yearCalculate factors for BI & PD combined, Med, PIP, Collision, and Comp

Allstate Insurance Company

METHODOLOGY

Bodystyles: Although Allstate insures about 1 out of 8 vehicles in U.S., when one considers

all the make/model combinations, there is not enough countrywide experience to

be fully credible at the vehicle level. In order to determine a more sound estimate of experience, vehicles with similar

characteristics are grouped together to form bodystyles. The combined bodystyle experience is used to supplement that of an individual

vehicle.Example Bodystyles (14 in total)

•Small Van

•Large Van

•Subcompact

•High Performance

Allstate Insurance Company

METHODOLOGY

Bodystyles – How Are They Determined? Physical Characteristics Marketing

• Manufacturer’s bodystyle

• What are it’s competitors?

• How will it be driven?

• Ex: Ford F150 Lightning

Not an exact science

Allstate Insurance Company

METHODOLOGY

Calculation of Factors

Vehicle experience Bodystyle experience Prior year’s factor

Tomorrow

Greater use of true multi-variate analyses by actuaries will greatly improve predictability of symbol rating.

Computer simulation of crashes will vastly improve accuracy of initial symbol assignment.

John Burge(310) 491-3547

[email protected]

CRASHPORT CAPABILITIES

crash intelligence for improved vehicle rating

WHO WE ARECrashport

A Tec-Masters, Inc. venture. Most advanced, biomechanical, auto accident injury analysis platform. Built on automotive-industry virtual prototyping platform. Database of over 10,000 vehicles with key physical properties. ISO 9001 certified. Leading biomechanics experts (Allan Tencer, PhD; Alan Nahum, MD, FACS).

Tec-Masters, Inc. Tec-Masters (parent company) employs 300 engineers and scientists Automotive division specializes in mathematical modeling of vehicle crash and vehicle crash sensing systems. Substantial expertise in dealing with complex data analysis, including expert systems, neural networks,

simulation and validation of complex weapons systems, national defense systems.

SIMULATION SAMPLES

THE POWER OF SIMULATION

Enables vehicles and vehicle components to be virtually tested under real world stresses, strains, crash avoidance situations, driver reactions, high-speed and low-speed crashes, etc.

EXAMPLE: INJURY EFFECT OF BUMPER DESIGN

Affect on Whiplash Injury

Bumper Force-Deflection Examples

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

0 1 2 3 4 5

Deflection (inch)

Fo

rce

(lb

f)

Caravan

Infinity

Jetta

Isolator

Rigid

Key Bumper Characteristics

CRASH ANALYSIS PLATFORM

Personnel Injury Thresholds

Vehicle Performance

Specifications compliance

Performance Requirements

Body / Structure

Interior Design

Restraints / Seats

Impact EnergyAcceleration PulseFootwell IntrusionCage displacementRoof Crush

Instrument layoutFlail spaceInterior paddingPedal distancesSteering column

Seat rigidityRestraint attachmentsRestraint controlsRestraint locationsHead protection

Simulation Environment

• Fast and accurate multi-body dynamics solver

• 3D CAD kernel to facilitate data exchange

• Generates vehicle models “on the fly” from vehicle specifications database

Analysis Types • Design of Experiments (DOE)• Monte Carlo• Goal-Seeking

Better than anyone else, we can:

• Rapidly and statistically analyze large quantities of vehicle crash scenarios.

• Evaluate the impact of a vehicle design change on crash results.

• Correlate vehicle design characteristics to crash results.

• Both for the striking vehicle and for all vehicles struck.

COMPARISONS TO TEST DATA

EXPERIENCE CREATION PROCESS

Crash Scenario

Occupant Characteristics

Inertia PropertiesMassCGMoments

GeometryExternalInternalCrush Properties

BumpersBody shellPanels

Suspension/SteeringResponse ratesRatiosTires

Vehicle Characteristics

InteriorSeatsRestraint systemSRS

Road SurfacePavement typeWet/DryCurbs

VisibilityNight/DayPrecipitationFog

VehicleSpeedManeuversOrientation

PassengersAgeGenderSizeLocation/Position

DriverAgeGenderSizeLocation/Position

Vehicle/Experience Database Experience Statistics

Statistical Distributions for:

Vehicle Characteristics

Crash Scenario

Occupant Characteristics

Monte

Carlo

Crash

Simulation

Experience Generation

Injury

Assessment

New Experience

Injury

Statistics

VALUABLE CAPABILITY FOR VEHICLE RATING?

Current Challenges Assignment of symbols to new vehicles is crude, often very wrong. Vehicle characteristics used for rating plans are crude and to not correlate well to occupant protection,

aggressivity, vehicle handling and damageability.

Benefits of Crashport Intelligence Accurate symbols for new vehicle designs

Symbol assignment based on key design characteristics that affect crash performance, not guesswork. Symbols for key coverages, including BI, 1st party medical and damageability (and possibly repairability).

More precise vehicle rating plan Year, Make and Model rated based on the vehicle design characteristics that affect crash performance. Separation of insured characteristics from vehicle characteristics for more precise assessment of risk.

Tomorrow

Greater use of true multi-variate analyses by actuaries will greatly improve predictability of symbol rating.

Computer simulation of crashes will vastly improve accuracy of initial symbol assignment.