Assembling the picture of risk using driver and vehicle data

Andrew Ballard, product principle, LexisNexis Risk Solutions, Insurance.

Consumers want insurance to be simple, transparent, fair and easy. In the drive to meet these expectations, insurance providers have invested in developing digital offerings that better meet the modern needs of their customers. It’s now quite normal to seek a quote or notify a claim via an app in the same way banking via an app is now the norm for many. As technology and data have enhanced the way motor insurance is shopped for and used, it should follow that data and technology will change how motor risk and liability is determined to offer a more personalised experience to customers.

Traditionally, the insurance market has predicted risk and claim likelihood based on information such as claim history, asset type & value, and crime in the area. More recently, data from vehicles fitted with telematics devices have added to the picture. While the ‘traditional’ and telematics data can offer a better understanding of risk it is usually segmented across multiple data-silos and can lack context.

Deeper insights on ADAS

However, much is being learnt about motor risk from data on Advanced Driver Assistance Systems (ADAS) through solutions such as LexisNexis® Vehicle Build. This insight, which will evolve as ADAS keeps evolving, is foundational to the insurance sector’s understanding of increasing levels of assistance and autonomy in vehicles, all the way to self-driving vehicles.

By accessing Vehicle Identification Number (VIN) level ADAS features for a specific vehicle, insurance providers can understand both the passive and the active safety features. In the future, overlaying this data with information on how the driver utilises those features (whether they disable them, how often they trigger, if they ignore them or abide by them), could provide a view of a driver’s risk in combination with the vehicle’s. Clearly, this will need connectivity from the car and drivers consent by opting in to share their data.

Add historic claims information for the individual and the vehicle and an insurance provider can pick up on trends involving loss type, vehicle, ADAS, and location of loss. This would paint a picture of how, when, and where the vehicle is driven.

This granular data will enable more accurate risk prediction and pricing but can also be used for claims reduction and even prevention. Insurance providers can already use data to inform customers of the ADAS features available in their vehicle and perhaps how to make the best use of them. In the future, they could even enlighten customers if they regularly use accident hotspots so they remain vigilant during their journeys.

Getting personal

Let’s not forget the proliferation of technology that’s become part of our day-to-day lives. New technology can enter our work and personal lives and quickly become integral to how we function – smartphones; smart watches; smart home devices. People are effectively Internet of Things (IoT) sensors, fully connected, 24/7.

The data generated from a person shows a much more rounded picture of their mobility behaviour. This offers the potential in motor claims, to help insurance providers understand how a customer chooses to get around. Where and how they travel could feed into behaviour models. Does an individual drive an electric car? Do they tend to take a more climate-friendly route – i.e. one with fewer hills, narrow winding roads, less traffic and constant speeds? Do they participate in the ride-share community or make use of e-bike and scooter schemes?

Staying ahead of the claim

With claims inflation front of mind, this insight could help claims teams better understand their customer and offer flexible alternatives to keep them mobile whilst their vehicle is being repaired or to offer a monetary incentive to use alternative mobility methods. It might also help them understand if they have access to another vehicle through friends, family or even ride-share.

The opportunities to do more for the customer and cut claims costs through great technology and the data that supports it cannot be denied. There are some hurdles to overcome but fundamentally it will require the right combination of data pertaining to the individual and the vehicle to create an insurance experience that more than delivers on customers’ expectations.

Image: Andrew Ballard, product principle, LexisNexis Risk Solutions, Insurance.

Guest Post This post was created just for Claims Media by a guest contributor.