Microscopic Traffic Models, Accidents, and Insurance Losses

TL;DR

This paper introduces a statistical methodology for microscopic transportation models to analyze traffic accidents and insurance losses, enabling counterfactual safety assessments of future vehicle and system designs.

Contribution

It develops a novel approach to connect microscopic traffic models with accident and loss data, allowing counterfactual analysis and valuation without relying solely on Monte Carlo simulations.

Findings

Method successfully integrates traffic simulation with accident loss modeling.

Enables counterfactual safety and insurance impact assessments.

Demonstrated using SUMO traffic simulator in case studies.

Abstract

The paper develops a methodology to enable microscopic models of transportation systems to be accessible for a statistical study of traffic accidents. Our approach is intended to permit an understanding not only of historical losses, but also of incidents that may occur in altered, potential future systems. Through such a counterfactual analysis, it is possible, from an insurance, but also from an engineering perspective, to assess the impact of changes in the design of vehicles and transport systems in terms of their impact on road safety and functionality. Structurally, we characterize the total loss distribution approximatively as a mean-variance mixture. This also yields valuation procedures that can be used instead of Monte Carlo simulation. Specifically, we construct an implementation based on the open-source traffic simulator SUMO and illustrate the potential of the approach in counterfactual case studies.