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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
jburge@crashport.com
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.
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