Microscopic Traffic Models, Accidents, and Insurance Losses

The paper develops a methodology to enable microscopic models of transportation systems to be accessible for a statistical study of traffic accidents. Our approach is intended to permit an understanding not only of historical losses, but also of incidents that may occur in altered, potential future systems. Through this, it is possible, from both an engineering and insurance perspective, to assess changes in the design of vehicles and transport systems in terms of their impact on functionality and road safety. Structurally, we characterize the total loss distribution approximatively as a mean-variance mixture. This also yields valuation procedures that can be used instead of Monte Carlo simulation. Specifically, we construct an implementation based on the open-source traffic simulator SUMO and illustrate the potential of the approach in counterfactual case studies.