Blending vehicle and driver data for fairer motor risk assessment

Authored by Tom Lawrie-Fussey, director of automotive, LexisNexis Risk Solutions, Insurance U.K. and Ireland

Motor insurance risk assessment has tended to rely on basic details about the vehicle combined with insights about the driver/s. But with the motor market under significant pressure to price accurately, cut claims costs, identify fraud and deliver a superb service from quote to claim, there is increasing demand for more granular vehicle centric data. In response, new innovations in vehicle insights are emerging that are not only painting a more detailed picture of the car and its history, without having to ask the customer for this information, but delivering that alongside highly predictive data on the driver, providing what is potentially the most accurate view of motor insurance risk possible today, all through data enrichment.

This highly accurate view of risk has become all the more important due to the changes occurring in the U.K. car parc. The typical length of car ownership has hit 9 years meaning the average number of miles clocked up is increasing. There have been record highs in used car valuations in the past year while research suggests upkeep costs are being cut by owners looking to save money where they can. At the same time, safety technology is both advancing and becoming standard in many new cars, with optional add-ons chosen by the first owner at the point of sale bringing additional layer of complexity to risk assessment. It is easy to see why there is a demand for more vehicle data to help ensure the way insurance providers rate, cover and support a claim is as accurate, fair and swift as possible.

How many past owners a car has had, how it fared on its last MOT, the mileage racked up, the most accurate valuation based on car listings data, whether that vehicle has been involved in a car accident and how it is equipped from an ADAS perspective are all questions that need answering to understand insurance risk.

Data on the ‘metal’ along with the history of a car is as unique as its owner, so it makes sense that the next evolution in motor insurance risk assessment is more granular vehicle centric data, combined with driver history data all available through one platform for swift digitised evaluation.

Combining all elements of the overall picture for fair and accurate risk assessment has always been vital but the economic downturn can mean fraud risk rises, so it is more important than ever to make sure all the pieces of the jigsaw are in place. In addition, the spotlight has been placed firmly on the motor insurance industry as the Financial Conduct Authority (FCA) warns insurance providers not to undervalue vehicles when settling claims.

The creation of LexisNexis® Vehicle Insights, offering access to a suite of vehicle centric data could not be better timed.

LexisNexis® Vehicle Insights is being designed to be added and combined with the portfolio of unique, proprietary motor insurance solutions available from LexisNexis Risk Solutions, including LexisNexis® Policy Insights, a contributory database containing more than 85% of the motor insurance market policy information and LexisNexis® Vehicle Build, a VIN-level ADAS fitment solution.

All this means insurance providers will gain access to a level of detail that was previously unavailable, for the individual, the insured vehicle, the true history of the vehicle in combination with a deeper understanding of the safety features available on the vehicle.

As the pressure mounts in the motor insurance marketplace to provide fair, accurate cover and the smoother, faster settling of claims, along with quick, proficient customer service, the ability to access and use granular data from a single source may prove invaluable.