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Business Research Methods, 14e/Schindler


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 improve-
ments 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


>The Scenario
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 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

State Farm:
Dangerous Intersections

Used with permission of
Pamela S. Schindler

Business Research Methods, 14e/Schindler

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 intersection. “There was
good reason to exclude police reports and traffic counts,” explained Nepomuceno.
“The reporting threshold for police filing reports on accidents differs widely from
jurisdiction to jurisdiction. Some will only fill out reports when personal injury or
criminal behavior is involved. Others will fill them out only when a vehicle is damaged
to the degree that it needs to be towed from the scene. Still others fill out such
reports on every incident. Traffic volume reports are often prepared infrequently
and often by independent sources. Not only may the data quality be questionable,
but the time period in which the data was collected may not match our 1998 incident
reports in every city involved. Also, when traffic volumes are factored in, low volume
roads with relatively few crashes are often deprioritized. Now that we’re through
with the 2001 study, we are asking ourselves if intersection volume should be factored
in, and if so, how it can be included without significantly increasing our effort in data

In the 1998 study, State Farm identified 172 dangerous intersections. The top
10 most dangerous intersections in the United States were released publicly
(www.statefarm. com). Public affairs staff for each state could request that up to 10
intersections be identified for their state. “This was usually determined by the resources
that our local public affairs staff were willing to put toward the program,” shared
Nepomuceno. “Each state had to recognize a top 10 national intersection, but they
could request that no more be released or that up to 10 intersections within their
state be released.” As of August 2001, 97 cities (56.4 percent) had applied for
State Farm grants.

“While some in the media claimed we had ‘hit a home run’ with the program, we
quickly learned that there was a lot more at stake than we had anticipated in generating
goodwill with transportation engineers,” indicated Nepomuceno. “This is, after all, a
traffic safety program and we would not achieve that goal without having the
cooperation of the traffic and transportation engineering community. First, while
initially they lauded us for the attention our listing brought to traffic concerns, we and
they soon discovered that the spotlight generated demand for immediate solutions,
solutions that they often didn’t have budgets to implement. Also, from their
perspective, not all accidents are the same; locations with accidents that result in
injuries and death should be given more attention. Some jurisdictions were upset
that we didn’t consider intersection volume and we didn’t include accident rate
data.1 The fact that the State Farm grants were intended to study the intersection

State Farm: Dangerous Intersections

Business Research Methods, 14e/Schindler


more completely wasn’t always seen as a solution to their immediate problems.”
To include accident severity, State Farm needed a measurement system for

classifying accidents. For the 2001 study, which used 1999 and 2000 accident data,
State Farm calculated a median property damage accident payout (approximately
$1,700). Incidents requiring payout of more than the median amount were classified
as “high severity”; those requiring less, “low severity.” Additionally, State Farm chose
to classify each accident using a multipoint scale. Zero was assigned to “no property
damage, no personal injury” incidents and a higher number was assigned to “High
property damage, personal injury” incidents, with numbers in between assigned to
levels of property damage and personal injury (see Exhibit SF 1–1). Accident scores
were summed to create an aggregate danger index for each intersection. Each
intersection was then weighted by dividing the danger index by State Farm’s market
share in the area. Of the 224 intersections identified, the top 10 were released to the
national media. Each of those 224 is now eligible for the $20,000 grant to study the
intersection to identify specific improvements; the top 10 are also eligible for $100,000
grants for improvements. In this second round, State Farm has committed $5.48
million to the safety program.

State Farm is making plans to track the success of the Dangerous Intersection
program. Once cities notify them of the completion of an intersection’s improvements,
State Farm will start tracking accidents for that intersection for a period of one year.
The first post-improvement evaluation study is expected in 2002. Additionally, State
Farm is taking steps to learn from the characteristics of the dangerous intersections.
Each grant application for an affected city’s study of a dangerous intersection must

• Collection and analysis of police report data.
• An engineer’s “geometric review”2of the intersection.
• A capacity profile of the intersection.
• A traffic conflict study.3
• A benefit-cost analysis.
• A schedule of improvements (short-term, intermediate-term, and long-term).4

State Farm plans to use the new data to identify patterns of problems. This may
lead to a model of desired intersection traits against which improvement plans can
be assessed, further increasing the effectiveness of the loss prevention program and
making life a little easier for the transportation engineers with whom they must partner
to achieve safety success.

Exhibit SF 1–1 Danger Codes
No Personal Injury With Personal Injury

No property damage 0 Y

Low property damage 1 1 + Y

High property damage X X + Y

State Farm: Dangerous Intersections

Business Research Methods, 14e/Schindler

1 Identify the various constructs and concepts involved in the study.
2 What hypothesis might drive the research of one of the cities on the top 10

dangerous intersection list?
3 Evaluate the methodology for State Farm’s research.
4 If you were State Farm, how would you address the concerns of transpor-

tation engineers?
5 If you were State Farm, would you use traffic volume counts as part of the

2003 study? What concerns, other than those expressed by Nepomuceno,
do you have?



1 Accident rate is calculated by dividing the number of accidents in a given period by the total

traffic volume over the same period.
2 The intersection geometry or physical layout of the intersection can play an important role

in influencing driver behavior at intersections. For example, a curve on the approach to an
intersection may impede the sight distance to a traffic signal, preventing drivers from
stopping in time. Or, a driver approaching two signalized intersections very closely spaced
may see the traffic signals at both intersections and become confused about which traffic
signal to obey.

3 A traffic conflict study is an observation study of traffic conflicts that do not necessarily
end in an accident but have the potential to do so. Recording and studying observations of
driver behavior is expected to help traffic engineers understand the same problems that
result in collisions. Some examples of conflicts are the sound of sharply applied breaks;
sudden, unsignaled lane changes; or drivers hitting their horns.

4 Short-term improvements might include sign changes, changes in lane markings, or signal-
timing changes. Most short-term improvements can be implemented in less than two years.
Intermediate-term improvements might involve lane widening, the addition of turn lanes,
etc., and be accomplished within 2–5 years. Examples of long-term improvements include
grade separation of the intersecting roads and can take 5–10 years to implement.

This case is based on information provided by John Nepomuceno in interviews that took
place on August 9, 2001, and September 13, 2001. Other sources include: “Miami Area Intersection
Tops State Farm List of Most Dangerous in the United States,” State Farm press release, June
27, 2001 (http://www.statefarm. com/media/release/danger00.htm); “Research” (http://
www.statefarm.com/media/methods.htm); and “State Farm 1999 Dangerous Intersection National
Status List” (http://www.statefarm.com/media/statustop.htm); and “State Farm’s Dangerous
Intersection Initiative,” Institute of Transportation Engineers press release, June 27, 2001

State Farm: Dangerous Intersections