1. 11 THE SCIENCE OF RISK SM Beginner’s Roadmap to Working with Driving Behavior Data

2. 2 THE SCIENCE OF RISK SM The Casualty Actuarial Society is committed to adhering strictly to the letter and spirit of the antitrust laws. Seminars conducted under the auspices of the CAS are designed solely to provide a forum for the expression of various points of view on topics described in the programs or agendas for such meetings. Under no circumstances shall CAS seminars be used as a means for competing companies or firms to reach any understanding – expressed or implied – that restricts competition or in any way impairs the ability of members to exercise independent business judgment regarding matters affecting competition. It is the responsibility of all seminar participants to be aware of antitrust regulations, to prevent any written or verbal discussions that appear to violate these laws, and to adhere in every respect to the CAS antitrust compliance policy. CAS Antitrust Notice

3. 3 THE SCIENCE OF RISK SM Portrait of a Risky Driver Image Credit: NASA Earth Observatory

4. 4 THE SCIENCE OF RISK SM Usage-Based Insurance Vehicle Telematics Driving Behavior Data The Basics

5. 5 THE SCIENCE OF RISK SM Part One Origins, Destinations, and Roadblocks

6. 6 THE SCIENCE OF RISK SM Segmentation Selection Mitigation Behavior Modification Research and Policy Objectives

7. 7 THE SCIENCE OF RISK SM Critical Conditions Télématique “Causal” Rating Variables Pay-at-the-Pump Paradigms

8. 8 THE SCIENCE OF RISK SM Micro-processors Sensors GPS OBD-II GPRS Computerization of Cars

9. 9 THE SCIENCE OF RISK SM Texas-only Pilot Utility-Bill Functionality Reactions Discontinuation Early Practitioners

10. 10 THE SCIENCE OF RISK SM Patents State Street Bank Bilski Litigation Intellectual Property

11. 11 THE SCIENCE OF RISK SM Use Cases Misuses of DBD IBM Framework EDR Laws Regulatory Levels Privacy

12. 12 THE SCIENCE OF RISK SM Part Two Infrastructure

13. 13 THE SCIENCE OF RISK SM Business Model Physical Resources Knowledge Base Pilot Tests Design

14. 14 THE SCIENCE OF RISK SM Feature Set Costing v. Granularity Deployment Installation Hardware

15. 15 THE SCIENCE OF RISK SM Methods Frequency Trigger Smartphones Communications

16. 16 THE SCIENCE OF RISK SM Flexibility Capacity Statistical Software Value-Added Services Requirements

17. 17 THE SCIENCE OF RISK SM Perils of Warehousing Access Controls Encryption Retention Security

18. 18 THE SCIENCE OF RISK SM Part Three Navigating the Data

19. 19 THE SCIENCE OF RISK SM Raw Data Degrees ObsUTCLatitudeLongitudeMPHMilesSecondsGallons 120:15:0049.50154.50-0.000.00 220:20:0049.45154.49403.63000.14 320:25:0049.41154.43828.86000.35 420:30:0049.36154.307715.09000.57 520:35:0049.33154.193820.712000.72 620:40:0049.35154.144224.715000.82 720:45:0049.35154.134325.218000.83 820:50:0049.36154.083828.518000.91 920:55:0049.34154.013233.524001.04 1021:00:0049.33153.972836.027601.10

20. 20 THE SCIENCE OF RISK SM Events Image Credit: NASA Earth Observatory 20:15:30Acceleration0.8 g-force 20:22:00Cornering0.5 g-force 20:28:00Braking-0.9 g-force 20:34:00Cornering-0.5 g-force 20:46:00Braking-0.6 g-force 20:15:00Ignition On 20:15:15Shift into Drive 21:00:15Shift into Park 21:00:30Ignition Off Aggressive Passive

21. 21 THE SCIENCE OF RISK SM VehicleDegrees Incr. Obs.UTCStatusLatitudeLongitudeMiles AccelBrakeCorner Trans.20:15:15Idling49.50154.500.0 --- Event20:15:15Driving49.50154.500.00.2000 Event20:15:30Driving49.50154.500.41.8100 220:20:00Driving49.45154.493.62.6000 Event20:22:00Driving49.43154.465.62.6001 320:25:00Driving49.41154.438.83.4000 Driving States Rolling Average {( 3.6 – 0.4) + (0.4 – 0.0 )} ÷ 2 = 1.8 Dummy Record: No Mileage Allocated to Idling Bucketing: Facilitates Aggregation

22. 22 THE SCIENCE OF RISK SM Conversions and Metrics Snapping and Mapping Traffic and Weather QC Checks Enrichment

23. 23 THE SCIENCE OF RISK SM Driving Portfolio VehicleTermStatusDateTime Jim’s CarJan - Jun, 2012DrivingWeekdayAM Peak LC BandRoad TypeFrom GarageWeatherVisibility 5Freeway11 - 15 Mil.FlurriesAverage Speed (mph)vs. Limitvs. FlowFatigueFuel Econ. 85 – 9022.5 – 27.517.5 – 22.511 - 15 mins.25 - 30 mpg MileageTime (mins.)Fuel (gals.)Harsh Accel.Harsh Brake 3.12.50.1101

24. 24 THE SCIENCE OF RISK SM Part Four Applications

25. 25 THE SCIENCE OF RISK SM Causative Rating Variables Interactions Operators and Driving Habits Classification Pricing

26. 26 THE SCIENCE OF RISK SM Scoring Tiering Verification Transferability Underwriting

27. 27 THE SCIENCE OF RISK SM FNOL Coaching Fraud Tools Civil Engineering Claims

28. 28 THE SCIENCE OF RISK SM Data Ownership Regulatory Filings Marketing What is your roadmap to success? Going Live

29. 29 Visit us online at www.verisk.com THE SCIENCE OF RISK SM