Do UBI Scores Provide Additional Insight on Drivers?

Is there a correlation between driving scores and insurance premiums? Watch Paul Stacy of LexisNexis® explain what was found when we plotted driving scores against traditional premiums not incorporating telematics data.

"We know from our data, and our claims exposure, that there is a range of driving abilities. Typically, this distribution shows that driving scores are relatively normally distributed, and this comes from real data. We know that one hundred is a good driving score and zero is a bad driving score, and we know it's correlated to loss ratio. So we can see that there's a strong correlation from our data, our billion miles and our claims exposure. But the key thing is, does the driving score tell us something that we already know? Does the driving score actually give us uplift in the rating models? Or does it just reinforce what we're already picking up in our traditional questions? To answer these questions, what we did was to take all of our driving scores and we plotted that against a traditional premium that doesn't encompass telematics data. What we should see is that there is a correlation between driving scores and traditional premiums if it doesn't show us anything new, i.e. driving scores are already baked into what we're used to using and what we're used to asking." (Watch video for more...)