In recent months we’ve been involved in some very exciting discussions around applying vehicle build data to UK insurance underwriting. The market has been telling us more and more that it is looking for risk attributes related to the vehicle itself, the vehicle build sheet with its multiple safety features and technologies, and not just the driver.
At LexisNexis Risk Solutions we’ve demystified ADAS (Advanced Driver Assistance Systems) classifications on a global scale with a classification system that standardises ADAS features so insurance providers know what those features are and what they do, regardless of what the manufacturer calls them. This expanded view of the vehicle can help our clients make more informed decisions about potential risk, boost customer loyalty and improve business performance. It is an important change, on the road to semi-autonomous vehicle features and eventually fully-autonomous vehicles.
LexisNexis Vehicle Build has been an incredibly complex piece of work, classifying over 45,000 different model types and variants, together with optional extras down to the level of an individual VIN (Vehicle Identification Number). There are several routes by which we can serve back this vehicle risk information to an insurance provider, based on the VIN.
From the viewpoint of the automotive industry we know also that the car makers need solutions for connecting vehicles more easily to the insurance ecosystem.
Most of the automotive OEMs already have sophisticated data platforms although in many cases these have developed in a way that is not fit for purpose when it comes to insurance data. On the automotive side of the equation, more and more of the vehicle makers are coming to view LexisNexis Risk Solutions as their R&D and innovation partner when it comes to insurance, simplifying the pathways for consumer consent and regulated use of data for example, and in many areas of authentication, making a more seamless consumer proposition.
Vehicle Build data is going to impact insurance in several ways
Our recent LexisNexis® research* has shown some significant reductions in claims frequency involving vehicles with ADAS. ADAS-equipped vehicles resulted in 27% fewer bodily injury claims and 19% fewer property damage claims when compared with similar vehicles that did not have ADAS. In terms of claims severity, it has been theorised that vehicles equipped with ADAS will be more expensive to repair when they’re involved in an accident. Our internal research estimates a modest lift in claims costs of around 1% to 2% for ADAS-equipped vehicles depending on the type of claim.
One feature like Automatic Emergency Braking for example, means that even when a collision does occur, it’s likely to happen at a slower speed with lesser damage due to the braking being applied faster. The potential impact of ADAS on a particular insurance provider is related to the age of the vehicles insured. It’s thought that ADAS technology is currently fitted to nearly 40% of vehicles on UK roads, with this proportion likely to continue rising. For fleet vehicles the figures are likely to be much higher due to the lower average age of vehicles.
So it’s a complex matrix of factors, where more and more vehicle technology is applied in the real world, but we’ve been collecting all the data.
In this video, listen as our Senior Director of Personal Lines Martyn Mathews explains how we’ve been able to classify and normalize this complex data opportunity and make it ready for the UK insurance market.
* 2020 US study by LexisNexis Risk Solutions of 11 million vehicles, model years 2014 to 2019.
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