This article is by Andrew Ballard, product principal, LexisNexis Risk Solutions, and it takes a look at how ADAS features can affect the pricing of vehicle risk, driver behaviour and enhance claims data.
Semi-conductor shortages reducing the inflow of new cars continues to have a knock-on effect on the values of second hand cars and looks set to be an issue for months to come. As well as looking at the macro-economic factors affecting a car’s valuation, many other factors are logically taken into account for insurance pricing such as its condition, mileage and general status. But what of the various items of safety technology now embedded in vehicles?
As technology advances and more vehicles incorporate Advanced Driver Assistance Systems (ADAS), such as driver alerts, lane departure warnings and parking aids, data on the vehicle’s build specification at a Vehicle Identification Number (VIN) level will be critical in informing pricing. But it has much wider potential too. Access to this data could also play an important role in helping insurance providers and consumers differentiate between those features that are more of a convenience aid and those that can actively assist such as performing an automated emergency stop.
On 26th January 2022, The Law Commission of England and Wales and the Scottish Law Commission (the Law Commissions) published their joint report, making recommendations for the safe and responsible introduction of self-driving vehicles. The report recommended introducing a new Automated Vehicles Act, to regulate vehicles that can drive themselves. It recommends drawing a clear distinction between features which just assist drivers, such as adaptive cruise control, and those that are self-driving.
Of utmost relevance to the insurance sector is that under the Law Commissions’ proposals, when a car is authorised by a regulatory agency as having “self-driving features” and those features are in-use, the person in the driving seat would no longer be responsible for how the car drives. Instead, the company or body that obtained the authorisation (an Authorised Self-Driving Entity) would face regulatory sanctions if anything goes wrong.
The Law Commission’s report underlines the increasing pressure on insurance providers to know, before underwriting a policy or handling a claim, exactly how a car is equipped from a safety technology perspective, whether any self-drive functions are present and how the ADAS functions present on the vehicle work together or in isolation to reduce a collision or road traffic accident. In our insurance speak – a reduction in claims frequency.
We have said before that having this knowledge puts the insurance sector in a powerful position to educate consumers on the presence of ADAS in their vehicle – particularly if the car has been bought second hand. The Law Commission’s report simply strengthens that argument.
Remarkably, despite ADAS features being present to help a driver, some people can find the alerts annoying and so disable them. In fairness, some earlier systems for lane keeping assistance could prove to be a distraction. Add to this the fact that most drivers were not educated or trained on how these features operate and how to get the best from them. Additionally, if a vehicle has had remedial bodywork after an accident, the sensors may not have been recalibrated correctly, meaning the technology is not working as intended. So, it is easy to see how a car buyer might be unaware of the ADAS technology at their fingertips and even if they are, they could remain unfamiliar with the benefits.
By using a vehicle-centric database like LexisNexis® Vehicle Build, a new solution to help insurance providers understand and evaluate the ADAS technology fitted to a vehicle at a Vehicle Identification Number (VIN), insurance providers can help educate drivers on the exact ADAS specification of their vehicle and encourage them to become familiar to their positive benefits.
Whilst door-to-door autonomous driving remains a thing of the future, many vehicles being sold today can perform driverless manoeuvres. Whilst currently restricted to parking and specific highways driving as defined within Automated Lane Keeping Systems (ALKS) where the legislation and rules remain to be confirmed, higher levels of automation and driver assistance are with us and will only improve over time.