How ADAS data may help motor insurance shift gear
If you drive a car that rolled off the production line in the last year – it will almost certainly have some sort of Advanced Driver Assistance System (ADAS) fitted. In fact around 70% of new cars on sale today are offered with driver assistance systems and close to 52% have over taking sensors and/or adaptive cruise control. Soon all new cars will be ‘born’ with ADAS features as part of the motor manufacturing industry’s zero fatalities objectives.
However, when you come to insure your car, the fact you have invested in ADAS is unlikely to be fully factored into the price you pay.
Insurers already know that ADAS features can reduce the frequency and severity of claims and want to know more about the car’s safety features to help pricing accuracy. The problem is that underwriters have no way of understanding what features are present on individual vehicles and how they combine to reduce collision frequency and cost.
This is largely because car makers tend to describe ADAS in a myriad of ways making it almost impossible to understand the purpose and performance of different features. For example, there are over 40 different names for automatic emergency braking and over 20 different names for adaptive cruise control. That’s 24,000 possible combinations, for just TWO safety features.
Also, some ADAS features are chosen as additional options when the car is purchased from new. Therefore, factoring for the presence of ADAS in pricing has been a challenge.
It has taken the creation of a common classification of ADAS by LexisNexis Risk Solutions to start to solve this problem for the benefit of both consumers and insurers. Ultimately, this will mean that the safety features of a car, along with how they behave, will soon be accessible to insurers – at a Vehicle Identification Number level. Testing of the data is already underway by motor insurance providers in the UK to understand how these vehicle centric insights correlate to claims, building on our shared knowledge from other countries.
With greater insight into the presence and performance of ADAS, it not only becomes possible to price more accurately but it opens the door to creating new products and services for consumers who have invested in car safety technology.
For an insurance broker looking to place risk at the point of renewal, knowing what ADAS features the vehicle has will really help to treat risk appropriately and at an individual level.
Using data on the presence and performance of ADAS represents a real step change in understanding motor insurance risk. Static data on vehicle build is just the start - dynamic data on when, how, where and how far a vehicle is driven will come next.
Statistics show that telematics technology has already improved road safety. Since 2011, there has been a 43% decrease in road casualties in the 17-19 age group. This directly correlates with the increased take up of telematics style policies, so with new data coming out of vehicles in the future, we can expect to see this trend continue.
Insurance providers already embracing vehicle centric data attributes will be at an advantage in a new era where vehicle centric data becomes a powerful factor in pricing.
Authored by Carla Hopkins, Senior Vertical Market Manager, LexisNexis Risk Solutions UK&I
At LexisNexis Risk Solutions, we believe in the power of data and advanced analytics for better risk management.
With over 40 years of expertise, we are the trusted data analytics provider for organisations seeking actionable insights to manage risks and improve results while upholding the highest standards for security and privacy.
We enable insurers and brokers to improve decision-making, increase profitability and transform business performance with actionable insights from our data and analytics solutions. For more information, please contact risk.lexisnexis.co.uk/insurance or firstname.lastname@example.org.
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