Vehicle Trip Complexity Scoring for Insurance Premiums
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Solution Overview
Problem
The insurance industry lacks an accurate and objective measure to assess route complexity, which is correlated with the likelihood of accidents and losses, using high-frequency location and vehicle data such as speed, orientation, and acceleration.
Innovation Solution
A computerized system and method that calculates a complexity score for vehicle trips based on fractal dimension, changes in orientation, speed, acceleration, and jerk, using telematics data from sensors, to determine driver risk and adjust insurance premiums accordingly.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If traditional insurance pricing methods are used, then pricing is simple and based on basic factors, but the ability to accurately assess driver risk and route complexity is insufficient
Solution Approach 1:
The patent replaces traditional mechanical/simple pricing methods with a computational system that uses fractal dimension analysis and telematics data processing to objectively measure route complexity and assess driver risk, enabling more precise pricing decisions
Solution Approach 2:
The patent introduces new parameters for risk assessment including fractal dimension of routes, changes in orientation, speed, acceleration, and jerk, transforming the pricing system from basic factors to a multi-parameter analytical model that captures route complexity
2Measurement precision
If high-frequency telematics data is collected and analyzed, then route complexity can be objectively measured, but data processing complexity and computational requirements increase
Solution Approach 1:
The patent substitutes manual or simple data collection with automated telematics sensors and computational algorithms that objectively measure route complexity through fractal dimension analysis, transforming subjective assessment into objective quantitative measurement
Solution Approach 2:
The patent introduces fractal dimension as an intermediary metric that simplifies the complex relationship between raw telematics data and route complexity, providing a standardized way to quantify and compare different routes without processing every individual data point
3Reliability
If route complexity is used as a pricing factor, then insurance pricing becomes more accurate, but the system requires integration with telematics sensors and data systems
Solution Approach 1:
The patent makes the pricing system multi-functional by integrating it with telematics sensors and data systems, allowing the same infrastructure to serve multiple purposes including risk assessment, route analysis, and premium calculation, thereby improving reliability without proportionally increasing complexity
Data Source
AI summary
Systems and methods are disclosed herein for pricing an insurance premium based on route complexity. The system includes a computer memory and a processor in communication with the computer memory. The computer memory stores telematics data received from a sensor within a vehicle. The telematics data includes at least one of geo-position information of the vehicle and vehicle kinematics data. The processor is configured to compute a complexity score of the trip based on the telematics data. The processor is also configured to determine a price for automobile insurance for the driver based on the complexity score of the at least one trip.