LexisNexis Risk Solutions has been busy during lockdown. While UK drivers have been learning to bake oddly shaped loaves, or attempt jail-style home haircuts, LexisNexis have developed a great product that pulls together the multiple strands of data on ADAS systems on cars, which mean insurers and brokers can now get a truly comprehensive picture of the vehicle build, as well as the driver history.
IE mag chatted with Carla Hopkins, Senior Vertical Market Manager at LexisNexis Risk Solutions, UK and Ireland, to find out more.
IE; The first thing that struck me reading the press release was that insurance providers could, in the future see when a factory recall on an ADAS gadget has been issued, and whether the policyholder has had the work done. It’s a big step forward in car safety isn’t it?
CH; It is one of the benefits yes, and it’s important that insurers work with the manufacturers on things like this. There is actually a recall product that is in development by our organisation in the US. Data from car manufacturers is used to a) identify the owner b) identify outstanding recall campaigns. There are many considerations we have to adapt, such as consumer consent and sharing of personal data within the GDPR framework.
Checking that recall work on ADAS has been done is crucial, and the difficult thing until now has been knowing which models have particular systems. For example some manufacturers specify certain ADAS features as standard, but then list them as optional extras on another sister model in the range. It can be confusing so Vehicle Build offers those detailed insights.
But it goes beyond recalls, if you just take one typical scenario; you park at a supermarket, someone hits your bumper at low speed and there isn’t a mark on it. You return and drive away not knowing that the sensors or camera in the bumper have been knocked out of alignment. Potentially that’s a dangerous situation, so you have a fault code alert that goes to the manufacturer, as well as the driver dashboard AND the insurer, then everyone is aware that there is an ADAS problem that needs fixing.
These fault codes are essential because there are over 40 different names for collision avoidance ADAS systems, some 20 plus names for adaptive cruise control. You can’t expect the consumer to know exactly what the fault is, so that’s where precise data comes in.
IE; So over time, insurers can build up a data history on the car, just like you would with a driver as regards NCD – but it goes way beyond that one raw data statistic?
CH; We divide the ADAS systems into groups, like front or rear bumper technology so that insurers can narrow things down rapidly. There are something like 12 million cars in the UK that have some kind of ADAS, and we started our product at 2014, so as the vehicle parc changes – older cars scrapped, newer cars sold – this dataset will definitely provide more depth and history on the vehicle. It will eventually influence repair tech and estimates to fix a car too, as we will know far more about how a particular fault is repaired, which brands cost more for the same problem and so on.
IE; The Vehicle Build product is being road tested by insurers, have you had any feedback on its initial value to the sector?
CH; In the UK the product is just starting to be tested so it’s early days but we’re expecting to see a reduction in claims frequency amongst drivers who use the Blind Spot Detection feature and fewer incidents amongst drivers using Collision Avoidance Systems. You can also see a stacking effect, so that drivers who choose particular combinations of ADAS features can really reduce their chances of being involved in an accident. Over time we can really see the value in drivers choosing ADAS as optional extras, and activating those systems as the default setting, as it shows a safety conscious consumer taking a pro-active approach. That has obvious benefits for the insurer, as well as the policyholder. This value of this is clear when you look at growth of ADAS in cars – in the US, 76% of 2019 models had at least one core ADAS feature, which is up significantly compared to 18% in 2014 models.
It’s also useful to look at analysis in the US. LexisNexis Risk Solutions analysed 11 million randomly selected U.S. 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.
IE; More consumers are shopping online for their next car, rather than visiting a traditional showroom. Do you think that Vehicle Build offers insurers a great opportunity at the point of sale, because you can adjust the premium based on the ADAS options to an extent?
CH; Yes, possibly. If you look at the recent history of Tesla you see that after an incident in the UK where a Model X collision avoidance system automatically kicked in to avoid a fallen tree, it caused a spike in interest in the technology. People could see the technology potentially saving their family’s lives – suddenly that becomes a primary reason for buying your next car.
It is possible that in the near future the mileage, the occupation and other policyholder information might not be as important as the interaction with ADAS systems, not just the choices when buying new, but the use of those systems over a couple years of driving. With this data insurers and brokers can build a true picture of the car and the driver over time.
IE; Plus, there’s all the new tech coming down the line from manufacturers and the increase of built-in telematics, driver coaches in the dashboard etc.
CH; Exactly. As new tech is fitted to 2021 models we can add that data into Vehicle Build, just keep adding layers, so we can understand how Occupant Protection features work in the real world, not just in testing situations. As we move towards driverless cars a new range of Object Alert and Avoidance systems will be increasingly important. It’s really a very exciting time to be in car insurance, so much is going to change in the next 5 to 10 years!
IE; It is, I don’t think we will recognise the cars of 2020 being related in any way to the models launched in 2030 – the pace of change is incredible. Carla, great talking to you and thanks for the insights.