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Ohio State Researchers Find Road Design Changes Can Reduce Distracted Driving Crashes

Columbus, Ohio (Nov. 19, 2018) – While efforts to combat distracted driving have primarily focused on passing new laws and changing driver behaviors, a new study from The Ohio State University’s Risk Institute reveals the important impact that modifying road design can have on reducing the frequency and severity of distracted driving crashes.

Researchers Zhenhua Chen and Youngbin Lym, assistant professor and his PhD student, in city and regional planning at The Ohio State University, found a 35 percent increase in distracted driver fatalities in Ohio and a 23 percent increase in serious injuries for the period 2003-2013. Additionally, distracted driving crashes were more severe in some road environments, such as work zones where they were up to two times more likely to be fatal.

This research found that urbanized areas such as Columbus, Cleveland and Cincinnati had much higher risk in vehicle crashes than other regions in Ohio. Even the length of a roadway segment or number of lanes had an impact on the frequency of distracted driving crashes. On the other hand, roundabouts had a significant effect on reducing the severity of distracted driving-related crashes. Other road environments that have a median or a shoulder with an asphalt pavement were also found to have fewer distracted driving crashes.

“This study helps to highlight that there is a need to improve traffic safety and road management,” said Phil Renaud, executive director of The Risk Institute at The Ohio State University Fisher College of Business. “It provides new evidence that supports taking steps to improve traffic signs and safety regulations for distracted driving in specific areas. There are things we can do on a local, city level to lower crash frequencies and severities.”

Key findings also include:

  • Distracted driving-related crashes account for approximately 18 percent of overall Ohio crash fatalities and 16 percent of Ohio serious injuries.
  • Distracted driving-related crashes are up to 49 percent more severe when they occur on a highway system.
  • The risk of vehicle crashes due to distracted driving is found to be highest in the Columbus area.
  • Distracted driving crashes are 5-10 times more likely to be fatal than severe in a rear end and or angle crash.
  • Roundabouts were found to be the single most effective road design in reducing the rate of crashes and crash severity. Overall, within the data (2013-2017) there were no fatal crashes within roundabouts.

The increase in distracted driving-related crashes in Ohio has become a major concern to various stakeholders, including insurance companies, transportation planners and policymakers. To help address this problem, which is so costly in terms of lives, medical bills, car repairs and insurance costs, the Property Casualty Insurers Association of America (PCI) funded The Risk Institute’s study and is working to raise awareness about the dangers of distracted driving.

“Those of us in the insurance industry hear far too many stories of how families are devastated because someone was texting behind the wheel,” said Bob Passmore, assistant vice president for PCI. “This research confirms some of the trends we have seen in auto insurance claims. Congested, urban roadways, infrastructure challenges along with the ubiquitous use of electronic devices combine to create hazardous driving conditions. As we have seen with other motor safety issues such as seatbelt use and drunk driving, there is no single answer to addressing the problem of distracted driving. It takes a coordinated strategy combining the enactment of laws, strong enforcement, drivers taking personal responsibility to avoid distractions and improvements in transportation infrastructure design.”

About the Risk Institute

The Risk Institute at The Ohio State University Fisher College of Business is a collection of forward-thinking companies and academics that provide effective risk management strategies to not only protect firms, but position firms to create growth and value. The Risk Institute helps members consider risk from all perspectives: legal, operational, strategic, reputational, talent, financial and many more. The Risk Institute operates at a unique intersection between faculty, students and professionals from a broad cross-section of industries. With a leading-edge approach to risk management, The Risk Institute creates a unique exchange for risk-centered conversations, ideas and strategies that can’t happen anywhere else.

About PCI
PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of approximately 1,000 member companies and 340 insurance groups, representing the broadest cross section of home, auto, and business insurers of any national trade association. PCI members represent all sizes, structures, and regions, which protect families, communities, and businesses in the U.S. and across the globe. PCI members write $245 billion in annual premium, which is 38 percent of the nation’s property casualty insurance marketplace.

Financial Flexibility Helps Keep Insurance Companies Solvent

In the face of ever-increasing weather volatility, insurance companies are becoming more adaptive to handle capital challenges and ensuring their solvency. While different divisions within insurance companies would ideally exist within a vacuum, severe price shocks often necessitate that resources flow between them.

In her working paper “How Do Hurricanes Affect Life Insurance Premiums? The Effects of Financial Constraints on Pricing,” Shan Ge, a researcher and PhD candidate at The Ohio State University’s Fisher College of Business and research fellow at The Risk Institute, examines this trend.

According to Ge’s model, a hurricane might result in a severe shock due to a large number of claims to the Property & Casualty (P&C) division while the Life division escapes relatively unscathed. Pricing adjustments can then be made in one division to help transfer needed resources to another division.

“The insurance industry offers a unique setting to study how shocks to financial constraints affect firms’ pricing behavior,” said Ge. “Many insurance companies are organized into groups of commonly owned affiliated companies. Some groups contain both life and P&C insurance subsidiaries, which are subject to unrelated shocks. For example, a hurricane can have a large impact on a P&C business but not directly on a life insurance business.”

In the wake of such an event, the Life division of the company will want to stimulate the amount of incoming capital and could lower the premiums of policies whose initial costs would be covered by the purchase price. Conversely, policies resulting in an initial outflow of capital would see their policies increase.

This increase in capital is important for a couple reasons: First, when assets are deemed too low to meet liabilities (say, when P&C claims spike due to a hurricane), regulators can seize control. Transfer of capital from one division to another can help to prevent this. Also, customers prefer to utilize better-capitalized insurers. This free flow of capital is vital to insurers when faced with heavy losses in one division vs. another.

While hurricanes bring a host of literal emergencies, flexibility of resources in their aftermath can help to mitigate some of the potentially devastating effects. Similarly, insurance companies facing financial shortfalls from such disasters can benefit by applying timely pricing strategy to allocate their resources where they’re needed most.

Shan Ge is a research fellow at The Risk Institute. The Risk Institute at The Ohio State University’s Fisher College of Business exists to bridge the gap between academia and corporate America. By combining the latest research with the real-world expertise of America’s most forward-thinking companies, the Risk Institute isn’t just reporting risk management’s current trends — it’s creating tomorrow’s best practices.

Risk Modeling: The Past and the Future

Risk Institute Portraits Fisher Hall - Third Floor Feb-02-2016 Photo by Jay LaPrete ©2016 Jay LaPrete

By  Philip S. Renaud II, MS, CPCU
Executive Director, The Risk Institute
The Ohio State University Fisher College of Business

 

No one can foresee the future, but risk managers are tasked with anticipating and using all resources at their disposal to predict what lies ahead. Risk modeling, based on data analytics, is one of the critical tools any risk practitioner can employ. However, like all things, modeling has undergone a transformation in recent years as more data is available upon which to base the models.

With risk modeling playing an increasingly crucial role in risk management, The Risk Institute at The Ohio State University focused its March Executive Education Session on Risk Modeling: The Past and the Future. Over 70 attendees were at the program from 27 companies and universities that gathered for the presentations and insightful Q&A on the topic.IMG_4839 Crop

The half-day session included a three-person panel of experts moderated by The Risk Institute Academic Director, Dr. Isil Erel. The panel was comprised of:

  • Rongsheng Gong, Vice President, Head of Risk Modeling and Analytics, Huntington National Bank
  • Al Schulman, Vice President (retired), Enterprise Risk and Capital Management, Nationwide

The session focused on the essential nature of risk modeling as a risk management tool and its role for both financial and nonfinancial firms. The speaker presentations centered on how risk models have changed as business, regulatory and economic environments have evolved over time. The impact of the recent financial crises was cited numerous times during the discussion as the speakers highlighted how previous risk models created by industry, banking and government failed to identify the magnitude of the risk impact to multiple business sectors.

The trio of presenters went in-depth for session attendees to understand the evolving, complex and at times volatile economic conditions impacting a firm’s markets and operations.IMG_4971 Crop

According to our speakers, five key lessons on effective risk modeling include:

  1. The financial crisis has led to both an increased knowledge of risk models and a decreased confidence in those same models.
  1. Since the crisis, new model considerations include counterparty risk, funding liquidity, regime-switching and government guarantees.
  1. The current system of banks, insurance companies and nations is highly and dynamically connected.
  1. Managing model risk includes multiple levels of validation for every step of its development.
  1. No matter how sophisticated the risk model, the human element is still the most important.

The session emphasized how financial firms since the recession have adapted their risk models to the changing business, economic and regulatory environments. Additionally the speakers focused on the interconnectedness of institutions (banks, insurers and government) and how that plays a vital role in managing how risk is modeled.

The session proved thought-provoking and demonstrated The Risk Institute’s unique role in uniting industry thought leaders, academics and highly respected practitioners in an ongoing dialog to advance the understanding and evolution of risk management. The Risk Institute’s conversation about risk management is open and collaborative with its relevance across all industries and its potential as a tool for competitiveness and growth.

For more information about upcoming events, our students, partners or research, visit our website: fisher.osu.edu/centers/risk.