Bringing new vehicle data into the motor insurance industry

Authored by Carla McDonald, LexisNexis Risk Solutions

Today, most new cars in the U.K. have some form of Advanced Driver Assistance System (ADAS). In addition, more and more cars are being built with connectivity allowing for the collection of driving behaviour data, with the consent of the driver.

ADAS data down to Vehicle Identification Number (VIN) level and real-time driving data can each offer an additional layer of insight and added benefits to existing ‘proxies’ used by motor insurance providers for calculating risk. This offers the opportunity for drivers to be rewarded for the investment they have made in an ADAS equipped car and their good driving habits through lower insurance premiums.  Additionally, connected car data could enable pay as you drive, pay how you drive and other mobility options.

Bringing this vehicle centric data into the insurance market in a way that is useable within insurance workflows has required a series of key steps.

Making the insurance market ADAS Aware

Starting with ADAS, insurance providers need to understand the impact of these valuable and effective systems on claims frequency to help calculate pricing. However, deciphering the precise specification on a new vehicle is very complex with a variety of standard and optional features that will include ADAS.

To address this problem, an ADAS classification system has been created by LexisNexis® Risk Solutions to logically sequence and classify vehicle safety features and the component’s intended operation or purpose. This was the first step in developing LexisNexis® Vehicle Build - a new ADAS data solution for insurance providers to incorporate the data into existing workflows.

The next step was testing and learning how ADAS fitments relate to insurance claims. Over two-and-a half million vehicles have been assessed across four European countries. Using all this intelligence gathered over the past year covering 80% of the U.K. car parc and vetting performance against claims, confirmation of the safety features of a car is now accessible to insurance providers at a Vehicle Identification Number level for insurance quotes, through LexisNexis® Vehicle Build.

Data from the connected car

Moving on to ‘dynamic’ data as opposed to ‘static’ vehicle build data, connected cars offer insurance providers the opportunity to use data on how a car is driven for usage-based insurance (UBI).

Making vehicle centric data ‘work’ for the good of the customer, car maker and insurance provider will be dependent on a central data exchange, where data can be normalised and managed in a compliant way. This will make the huge volume of connected car data meaningful and useable for insurance and other services.

To this end, connected car data exchanges have been created by LexisNexis Risk Solutions to enable driving data from motor manufacturers to be brought to insurance providers in a compliant, normalised, contextualised and standardised manner. The ultimate goal is to deliver this back as an actuarial grade driving score for UBI, regardless of the vehicle make, model or device type.

his approach removes much of the complexity and cost involved in delivering insurance benefits from the connected car. It also helps pave the way for mobility models of the future.

To this end, we’ve created a data exchange that can ingest connected car data and already multiple car makers are participating. In addition to the recent announcement with Mercedes Benz Connectivity Services, further deals will be signed with major automotive brands in 2021.

In the near future, we will see the evolution in ADAS features that have over-the-air update capabilities, giving the consumer greater flexibility and control. We are starting to work with our car manufacturer partners to evolve the LexisNexis Vehicle Build solutions to best reflect these innovations.

Ultimately customers will have the most to gain by paying insurance based on the exact features on their car and how they drive it, which in turn can help reduce cost of ownership and make all our roads safer.

If you would like to get in touch with Carla McDonald to find out more about the LexisNexis Risk Solutions proposition, CLICK HERE, leave a message and youTalk-insurance will pass your enquiry on