Resumen de Incorporating telematics information in motor insurance ratemaking: The role of mileage and driving habits
Nowadays, the calculation of premium rates based on driver behaviour is a great opportunity for the insurance industry. In this paper, we show which is the effect of incorporating data collected from a GPS device regarding driving patterns in motor insurance ratemaking. We use a classical Poisson regression model that is updated with telematics information. We use real data from usage-based insurance policies. We conclude that the distance travelled by the driver and driving habits have a significant effect on the expected number of accidents and, therefore, on the cost of insurance coverage.
