Impact of Bonus-Malus System Refinements on Time-To-Accident in Armenia’s Cmtpl Insurance: A Survival Analysis Approachal Analysis Approach

Abstract

This article investigates the impact of recent reforms in Armenia’s Bonus-Malus (BM) system on the time-to-accident among Compulsory Motor Third-Party Liability (CMTPL) policyholders. Specifically, it evaluates whether the 2022 introduction of claim severity adjustments influenced policyholder behavior across different risk groups. Utilizing survival analysis methods on a dataset comprising over 2.3 million insurance contracts, the research identifies statistically significant improvements in accident-free durations post-reform. Results reveal that policyholders in certain vehicle categories and risk classes exhibited behavioral shifts, while others, such as public transport drivers and individuals in extreme BM classes, did not. Policyholder’s gender emerged as a statistically significant risk factor, with female drivers showing consistently lower accident-free times. The findings underscore the effectiveness of claim severity-based malus policies and suggest that further personalization for example through telematics, can enhance fairness and incentivize safer driving