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LexisNexis factors ADAS in to Premiums
- June 25, 2020
- William Payne
ADAS can reduce the risk of personal injury to passengers and physical damage to vehicles. More advanced ADAS systems reduce these risks more than older ADAS systems. Insurance risk specialist LexisNexis has now launched a product to allow vehicle insurance providers to factor ADAS sophistication into the insurance premiums they offer drivers.
LexisNexis Vehicle Build harnesses the company’s ADAS Classification System, combining it with machine learning and analytics. The output is integrated into existing insurance industry workflows, including LexisNexis Auto Data Prefill.
LexisNexis Risk Solutions analysed 11 million randomly selected US vehicles within model years 2014-2019, and using proprietary information compared vehicles equipped with a set of core ADAS features against vehicles without those features. LexisNexis found that ADAS equipped vehicles showed a 27% reduction in bodily injury claim frequency and a 19% reduction in property damage frequency, but also found that severity for ADAS-equipped vehicles increased only slightly.
LexisNexis internal analysis shows 76% of 2019 models had at least one core ADAS feature, which is up significantly compared to 18% in 2014 models. The growing prevalence of ADAS features underscores the importance for carriers to be able to account for features as they price policies. Having these insights is also proving instrumental in evaluating the effectiveness of the latest vehicle safety features in reducing collisions and insurance claims.
“Vehicle-centric data is becoming more significant to US insurers as cars continue to offer ADAS and other safety-related packages as add-ons to base models. Consumers who select these upgrades to their vehicles have an expectation that this choice will positively impact their insurance premium,” said Tanner Sheehan, Associate Vice President of Auto Insurance, LexisNexis Risk Solutions. “By providing a classification of VIN-level insights with our Vehicle Build product, carriers are able to more easily evaluate the evolving vehicle technology and improve pricing segmentation.”