1. Behavior – The New Frontier in Driver Classification presented by Don Bashline RightFind Technology

2. If behavior is the answer, what’s the question? Why do crashes happen? –Is it because the driver missed a mortgage payment? –Because the driver is a man? –Lives in a city? –Is young?

3. Correlation vs. Causation All the standard classification criteria correlate highly with claims None of them represents causes of claims

4. What Causes Crashes? “The most important factor influencing traffic safety is individual human behavior” - Leonard Evans More than 90% of crashes linked to road user - Indiana University study

5. What Types of Behavior Matter? Risk-taking behavior –speeding –running red lights –aggressive driving Alcohol use Errors of judgment or perception

6. Can we predict these behaviors? Doing so would give us a way to predict crash (and with it, claim) frequency for a driver We could then classify and price this driver more accurately

7. Yes we can! Personality traits linked to crash- causing behaviors can be measured using standard techniques More than 50 years of research demonstrates connection between personality and crash frequency

8. How We’re Making it Work 1 Affiliated with academic behavioral psychologist to develop test questions –survey of literature –administer questions –evaluate questionnaire results

9. How We’re Making it Work 2 Initial Results were Encouraging –certain personality traits correlated highly with insurance claim experience –these traits were not always those intuitively associated with aggressive driving

10. How We’re Making it Work 3 First Market Research Co. administered revised questionnaire across country and held focus groups –results of first survey largely confirmed –focus groups were particularly revealing

11. How We’re Making it Work 4 Retaining exam construction expert –will use proven items and new ones measuring same traits to develop tests –these tests should be robust, capable of validation

12. What’s next for RightFind We expect approval of our business method patent in 1st quarter of 2003 end of 1st quarter 2003 will have array of exams available for licensing We’ll also license technique to developers

13. How will the tests be used? Refining classes with large “between variance” - find good risks among young drivers, bad records “Bad things happen to good people” - improve predictability of driving record

14. What will they look like? Can be given on phone, as part of application, by agent, or on internet Length from a few questions (1-2 minutes) to 10-15 minutes. Questions directly related to personality attributes

15. Why they’ll work Classification refinement key to profitability Equity - enable individual drivers to be rated on causative factors Claims are infrequent - bad drivers will often have good driving record (and vice versa)

16. but what about...? Change is difficult Will regulators or consumers object? Can the tests be “gamed?” Dose/response problem How well can we measure this?

17. Down the road for RightFind Continue refining driver tests Med Mal? Patients likelier to sue Docs with bad attitudes Workers’ Comp? Management attitudes toward work and workers mean a lot Commercial auto? Truck and taxi drivers

18. Down the Road for Risk Classification Eternal conflict: insurers want to use relevant information, but is it “socially acceptable?” Genetic markers? Brain mapping?

19. Questions? Discussion? Thanks for your attention and for the invitation! Visit us at www.rightfindtech.com