State Farm’s Dangerous Intersections Initiative

1. State Farm’s Dangerous Intersections Initiative John Nepomuceno, P.Eng., MBA International Forum on Traffic Records & Highway Information Systems August 2002 Orlando, Florida

2. Outline • Study objectives and strategies • Data sources • Results • Next steps 28th International Forum on Traffic Records & Highway Information Systems

3. Vehicle 2% 6% 2% 3% Road 3% 27% Driver 57% Causes of crashes Road-related causes account for approximately 35% of crashes 28th International Forum on Traffic Records & Highway Information Systems

4. Reporting threshold Fatal-DUI, single-vehicle run-off road crash Frequency Enforcement Engineering Rear-end PDO crash during rush hour Increasingseverity Under-reporting of crashes 28th International Forum on Traffic Records & Highway Information Systems

5. Minimum Reporting Thresholds 2 Injury 1 Towaway 1 Between $2000 and $3000 0 Between $1000 and $2000 18 Between $750 and $1000 Minimum Reporting Thresholds 5 Between $500 and $750 18 Between $250 and $500 5 Between $0 and $250 1 No reporting Number of states (incl. D.C.) 28th International Forum on Traffic Records & Highway Information Systems

6. Dangerous Intersections Initiative • Goal: • To reduce the frequency and severity of crashes at high-crash locations and raise public awareness about the risks of everyday driving • Strategies: • Use own claims data to identify crash-prone locations around the country • Provide funding to improve intersection safety • Use the popular media to raise awareness 28th International Forum on Traffic Records & Highway Information Systems

7. State Farm Insurance • Detailed cost information on vehicles • Largest claims database in the country • In 1998, our research databases were amended to include a location field • Date, time and “facts-of-loss” fields 28th International Forum on Traffic Records & Highway Information Systems

8. Dangerous Intersections Initiative • Sorted according to location field • Frequency-based; claim frequencies factored up to reflect market share locally • Location confirmed against facts-of-loss data • In 1999, limited to 1 year of data; 2 years in 2001 28th International Forum on Traffic Records & Highway Information Systems

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14. Dangerous Intersections Initiative • Rates vs. Collision Frequency • Intersection volume data is not consistently available throughout the country • Prioritization based on rates would increase work at least ten-fold • Collision rates often result in low volume roads being prioritized • Collision frequency is easier to convey to public 28th International Forum on Traffic Records & Highway Information Systems

15. Dangerous Intersections Initiative • Better business case for State Farm • Insurance premiums are a function of frequency and severity of crashes Frequency x severity = # policyholders x premium 28th International Forum on Traffic Records & Highway Information Systems

16. Crashes c2 c1 v1 v2 Volume Dangerous Intersections Initiative AR1 = c1/v1 AR2 = c2/v2 AR1 > AR2 28th International Forum on Traffic Records & Highway Information Systems

17. Dangerous Intersections Initiative • Identified Top 10 nationally • Provided up to $20,000 for a study • For Top 10 nationally, $100,000 for improvements • 1999 - 172 locations identified • 2001 - 224 locations identified 28th International Forum on Traffic Records & Highway Information Systems

18. Evolution since 1999 • Crash index – weighted score to reflect higher severity • Two years of data (1999 and 2000) • Assistance from the Advocates for Highway and Auto Safety • Advance contact to notify affected communities 28th International Forum on Traffic Records & Highway Information Systems

19. State Farm Danger Index 28th International Forum on Traffic Records & Highway Information Systems

20. Results • Communities representing 92 of the 172 locations identified in 1999 applied for and received grants • Received approximately grant applications representing 120 of the 224 intersections named in 2001 28th International Forum on Traffic Records & Highway Information Systems

21. Next Steps • Conduct an E-B evaluation of those intersections that were studied and improved in the 1999 Initiative (Q4 of 2002) • Support national initiatives in intersection safety • Support research initiatives in highway safety 28th International Forum on Traffic Records & Highway Information Systems

22. Final Words • Last year, SF lost more than $5B • Need to do what we can to reduce the frequency and severity of crashes • Auto insurance is becoming commoditized • Raising rates is an unattractive alternative • To remain competitive, we must do more to manage losses • Traffic engineering can be very effective in reducing crashes 28th International Forum on Traffic Records & Highway Information Systems

23. Contact Information John Nepomuceno, P.Eng., MBA State Farm Insurance Companies Bloomington, IL 61710-0001 Tel: (309) 763-5706 John.Nepomuceno.LUJD@statefarm.com 28th International Forum on Traffic Records & Highway Information Systems