Vehicles designed with ADAS features are less likely to become involved in collisions, but are not more expensive to correct than those without those advanced features, according to research conducted by LexisNexis Risk Solutions.
The presence of a minumum of one ADAS feature resulted in an 8-percent reduction in collision claims frequency, while claims severity fell by 3 percent, according to the study, titled “ADAS and Car insurance Claim Severity.”
LexisNexis found increased reductions in frequency of bodily injury and property damage , of 27 % and 19 percent, respectively. The study was based on a random selection of more than 11,000,000 vehicles from model years 2022-2022.
BI and PD showed increases of two percent and 1 %, respectively, in severity. The analytics provider called this “minimal movement.”
Contrary to “market perception,” frequency reduction was not negated by a rise in severity. “Our research suggests that change in claim severity is minimal and improvement in loss price is attributed overwhelmingly more to reduced frequency,” reads the report, compiled by John Kanet, P.E., director, Auto Insurance, for LexisNexis.
“The traditional wisdom has been that ADAS technologies should mitigate the number of insurance claims, but the impact of ADAS on claim severity has been less clear. ADAS features include expensive and sophisticated technical components and therefore are often installed on exposed regions of vehicles, making them prone to damage from a collision,” the report states.
LexisNexis quantified the increasing adoption of ADAS features by OEMs. Based on its representative industry sample, the report states, 38 percent of vehicles from model years 2022 to 2022 had a minumum of one core ADAS feature — and that number is for certain to continue rising.
The report discovered that, by August 2022, 40 % of registered vehicles in the United States come from what it really termed the “ADAS Era,” which it said began with the widespread accessibility to we've got the technology in 2022. Thanks to vehicle turnover, that number is rising by 6 percent each year, the report said.
Naturally, the newer an automobile, the much more likely it had been to have at least one ADAS feature. LexisNexis found that the amount stood at 76 percent for 2022 vehicles, when compared with 18 percent for 2022 vehicles.
Under the $1.2 trillion federal infrastructure bill awaiting the signature of President Joe Biden, all new vehicles is going to be required to have automatic emergency braking and lane-keeping assist, under a timetable to be set by the secretary of transportation.
The preceding findings were from LexisNexis’ “univariate”examination, where the only variable was whether or not a vehicle had a minumum of one ADAS feature. LexisNexis further analyzed the information, zeroing in around the impact on claim frequency based on combinations of what it calls “core ADAS features.” Researchers examined some 60 unique features provided by OEMs, and categorized the 10 core features as adaptive cruise control, blind spot warning, blind spot mitigation, driver monitoring, forward collision warning, forward collision mitigation, lane departure warning, lane departure mitigation, rear collision warning and rear collision mitigation.
Pairing these features with one another had an effect on claims frequency and severity, LexisNexis found. For example, it found that the mixture of forward collision mitigation, adaptive cruise control, blind spot mitigation and lane departure mitigation was responsible for an 18 percent decrease in property damage claim frequency when compared with vehicles with none of these features.
Because some features, for example adaptive cruise control and forward collision mitigation, use similar sensors, many OEMs think it is cost effective to offer ADAS features included in a bundle. In fact, it found that 92 percent of vehicles with a minumum of one feature in fact have more than a single.
“It can also be an advertising and marketing policy to offer a more comprehensive group of safety features to attract the customer,” the report states.
LexisNexis figured insurers have an opportunity to provide “significant pricing segmentation” for ADAS and non-ADAS vehicles, utilizing a service such as its Vehicle Build, which provides build data on specific vehicles. A vehicle identification number, or VIN, seldom provides detailed information about which ADAS includes a particular vehicle might have.
But when carriers do use a unique pricing advantage for ADAS-equipped vehicles, this should lead to less friction in the claims process when the loss and repair require restoring and calibrating ADAS systems. Failure to correctly reestablish the safety system would negate the potential benefit the discount is being offered for.
“With newfound underwriting data available through LexisNexis Vehicle Build, guesswork involving an automobile's ADAS features has become anything of the past, and that we anticipate continuing to bridge the automotive and insurance markets so consumers can shop for auto insurance inside a new and empowering way,” Adam Hudson, vice president and general manager, U.S. Connected Car, at LexisNexis Risk Solutions, said in a statement last month.
According to data from the Insurance Information Institute, in 2022, the most recent typical year, combined BI and PD losses amounted to $96.19 billion, while comprehensive and collision losses totaled $62.64 billion.
