Car manufacturers have been investing heavily in technology to make their cars safer. As a consequence, most relatively new cars today have some sort of Advanced Driver Assistance System (ADAS) fitted
Car manufacturers have been investing heavily in technology to make their cars safer. As a consequence, most relatively new cars today have some sort of Advanced Driver Assistance System (ADAS) fitted. In fact, close to 80% of new cars on sale today are offered with a self-activating safety system and 1.8 million buyers a year are able to benefit from collision avoidance technology. 1
Different functions and forms of ADAS
ADAS has many functions and forms: from Automatic Braking Systems (ABS) to Pedestrian Monitoring. ADAS also requires different levels of human intervention. The UK Government is currently exploring the risks and opportunities from this perspective in its consultation on the use of Automated Lane Keeping Systems (ALKS) 2 – another form of ADAS. This is part of its commitment to reduce road deaths through advances in vehicle autonomy.
Insurance providers are starting to realise that ADAS features can affect the frequency and severity of claims. Until recently, underwriters had no way of understanding what features are present on individual vehicles. Importantly, they need to understand the complete picture of ADAS fitment: those features fitted as standard plus those chosen as optional extras, right down to the Vehicle Identification Number, and how they combine to reduce collision frequency and loss cost.
This is largely because car makers have tended to describe ADAS in a myriad of ways. For example, there are over 40 different names for automatic emergency braking, and more than 20 different names for adaptive cruise control. Therefore, factoring for the presence of ADAS in pricing has been a challenge.
The solution to this problem started with the creation of a common classification of ADAS by LexisNexis® Risk Solutions. Machine learning was used to scan millions of lines of car manufacturer vehicle data. This logically sequenced and classified vehicle safety features and each component’s intended operation or purpose.
This classification system provides the foundation for LexisNexis® Vehicle Build. Access to vehicle safety data will help insurance providers factor for their presence throughout the customer journey – in pricing, mid-term adjustments and renewals. As well as establish the differences in risk profile associated with the vehicles that have these safety features.
Ultimately, this will mean that the safety features of a car, along with how they behave, will soon be accessible to insurance providers at a Vehicle Identification Number (VIN) 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 loss.
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.
Knowing the ADAS features present on a vehicle also opens the potential for insurance providers to play a valuable role in educating consumers on the safety features in their car when they apply for insurance. Driver awareness of what ADAS can and cannot do is critical to the development of this technology and the safety of our roads.
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, mileage data direct from the odometer will be next, to help support pay as you go and pay per mile-type insurance cover. Ultimately, connected cars will bring in dynamic data on when, how, where and how far a vehicle is driven.
Insurance providers already embracing vehicle centric data attributes will be at an advantage in a new era where data on and from the car becomes a powerful factor in pricing.
Carla Hopkins, Senior Vertical Market Manager, LexisNexis Risk Solutions UK&I
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