State Farm: Dangerous Intersections
State Farm, the nation’s largest auto insurer, distributed a list of the 10 most dangerous intersections in the United States based on crashes resulting in claims by its policyholders. What started as a study to reduce risk turned into an ongoing study that directs a major public relations effort: State Farm provides funds for communities to further research their dangerous intersections and initiate improvements based on the research. This case tells you how the State Farm Dangerous Intersections initiative got started and how it is done. www.statefarm.com
State Farm Insurance has a rich history of proactive safety involvement in auto and appliance design to reduce injury and property loss. In June 2001, State Farm Insurance, Inc., released the second report in its Dangerous Intersection reporting series. State Farm modeled its program after an initiative by the Insurance Corporation of British Columbia, Canada (ICBC), and the American Automobile Association of Michigan (AAA) to help position the nation’s largest auto insurer as the most safety-conscious insurer. ICBC had patterned its program on an earlier effort in Victoria, Australia. AAA, in turn, benchmarked its program on the ICBC program. AAA invited State Farm to help fund one of its intersection studies. State Farm saw this as an opportunity to expand its effort into a nationwide campaign in 1999. “The 2001 study is part of a larger effort focused on loss prevention and improving the safety of intersections around the U.S.A.,” shared State Farm research engineer John Nepomuceno. State Farm has allocated significant resources as well as funds to the initiative. Since its inception, every city with an intersection on the overall list of dangerous intersections is eligible to apply for a $20,000 grant to defray the cost of a comprehensive traffic engineering study of the intersection. Additionally, each city named to the national top 10 dangerous intersection list is eligible for a grant of $100,000 per intersection to defray some of the cost of making improvements. All totaled, State Farm offered $4.44 million to the safety initiative in its first year. Due to its large market share, State Farm is the only U.S. insurer in a position to mine its databases for the requisite information on accidents to come up with a viable U.S. list. But it found that although it had the interest to do so, its data warehouse did not have sufficient information to tally accident rates for intersections. To rectify this, in 1998 State Farm included a location field as part of the data that its claims adjusters regularly complete. This location information, in open-text format, indicates whether the accident took place in an intersection or
Marketing Research, 1/e, Cooper/Schindler
State Farm: Dangerous Intersections
as part of an incident related to an intersection accident, and identifies the intersection. Following the 1999 study, the fields for identifying intersections were further refined.
In the first study using 1998 data (reported in June 1999) as well as the 2001 study, State Farm looked at accidents involving only intersecting roads. They excluded any accident that occurred at the intersection of a road and a highway access or egress ramp. State Farm also looked only at accidents where the State Farm–insured driver was at fault.
Because of the study’s focus on road safety engineering, the first study ignored accident severity and made no attempt to isolate demographic (age or gender of driver, driving record, etc.) or geographic (weather conditions, population of area, etc.) factors related to the accident. It also looked only at State Farm’s own internal incident reports, not at any public records involving traffic patterns or volume or police incident reports. Based on industry market share information, State Farm was able to estimate the total number of crashes at a given...
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