Personality Traits, Driving Behavior and Motor Insurance Pricing: Evidence from Young Drivers

Research has shown that young drivers are associated with risks embedded in a wide range of driving situations. In addition, personality traits of a driver are important and it influences both risk perceptions and driving behavior. Subsequently, these traits are also imperative as determinants in motor insurance pricing. This study investigates the relationship between personality traits and driving behavior among young drivers in Malaysia. Specifically, this study attempts to examine the profile of young drivers in understanding the driving behavior and to provide an insight into the influence of personality traits on motor insurance pricing structure. One hundred UUM students aged between 18 to 25 completed a questionnaire form which are designed to capture their personality, driving background, risk characteristics and driving behaviors and styles. The findings depict significant associations between several personality traits, namely age, gender and risk characteristics and driving behavior. It could be concluded that younger and male drivers are associated with aggressive driving behavior, higher tendency of road accidents and prone to commit traffic violations. In addition, these personality traits should be included in the new motor insurance pricing structure in order to establish fairer motor insurance prices