Here is a fact that is hard to ignore – the right combination of ADAS features could reduce the likelihood of a motor insurance claim by over a third [i]. More importantly, 98% of new cars on sale today have one or more Advanced Driver Assistance System (ADAS) feature, compared to just 17% in 2014. Cars are becoming safer, and the subsequent opportunity to reduce claims frequency is growing exponentially. Yet until recently, it was practically impossible to ascertain exactly which ADAS features a specific vehicle was equipped with when writing a motor insurance policy.
Anticipating the increasing growth of ADAS equipped vehicles and correspondingly, a rising demand for ADAS insights from the insurance market, LexisNexis® Risk Solutions data scientists developed an ADAS classification system three years ago, one made specifically for the insurance market. They then embarked on a huge and ongoing exercise to analyse millions of ADAS equipped passenger cars and light commercial vehicles (alongside the associated insurance claims) to understand the performance of ADAS on specific vehicles and how they relate to claims frequency.
The result of this work is LexisNexis® Vehicle Build, a point of quote data enrichment solution which reveals the presence, purpose and behaviour of ADAS at Vehicle Identification Number (VIN) level, plus its effectiveness in reducing claim frequency.
This unique level of intelligence is now being delivered to a growing number of motor insurance providers. They can choose to either have this data at a granular level across all of the 65 ADAS Features, or as an ADAS Rating Indicator value of zero through five (0-5) in terms of reducing claims frequency based on the number and type of features on a specific vehicle.
Underlining just how far ADAS technology has come, our analysis shows that since 2014, the number of vehicles which have a positive ADAS Risk Indicator (from 1 to 5) has risen by 58% [ii]. In essence, this means that more vehicles have more ADAS, and these features are becoming better and better at reducing claims. But not all manufacturers and models are progressing at the same rate. In fact, some modern vehicles remain on the same ADAS Risk Indicator they were on in 2014. It is crucial that these differences are understood fully by the insurance market, at speed at the point of quote.
Here are another couple of facts: human error is a factor in 95% of all road accidents (according to RoSPA [iii]) and nearly 38% of Britain’s road accidents occur due to a driver failing to look properly [iv]. The case for ADAS is clear.
As more car buyers recognise their value, the trajectory of ADAS evolution will only continue upward. Safety systems will move from driver warnings to mitigation, and solutions such as LexisNexis Vehicle Build will continue to evolve at the same rate, helping motor insurance providers to keep pace and deliver fair and accurate pricing based on the clearest view of a vehicle’s claims risk.
[i] LexisNexis Risk Solutions Analysis
[ii] Lexis Nexis Risk Solutions Analysis
Content provided by Andrew Ballard, product principal, UK and Ireland, LexisNexis Risk Solutions