Optimized Road Status Level Grading Method in Driving Style Evaluation for Pay-How-You-Drive Commercial Vehicle Insurance

The premium actuary scheme in pay-how-you-drive (PHYD), which is a promising form of commercial vehicle insurance product, can comprehensively evaluate driving risk of each customer by analyzing data collected from on-board diagnosis (OBD) module, and can give a more objective result than traditional vehicle insurance which fixes the premium only based on past violations and claim records. Such premium actuary process depends mostly on driving risk, which may be affected by driving behavior as well as driving environment, Different geographical condition as well as road status may change the driving habits of each driver to a great extent, thus, it is of great significance to understand the influence of driving environment on drivers and to grade the road status levels. Till now, even if road status evaluation and grading issue have been widely studied by scholars, their purposes to do such studies are rarely based on the application of PHYD commercial vehicle insurance product. In this paper, driving backgrounds has been taken into consideration, and an optimized road status level grading method has been built, which can serve as a correctional tools in the premium actuary process for PHYD commercial vehicle insurance product.