A new analysis from LexisNexis Risk Solutions examines the effect of advanced driver assistance systems (ADAS) on insurance claim severity in a multivariate setting, revealing that by having at least one core ADAS feature in a vehicle there was a reduction in loss cost including a 23% reduction in bodily injury loss cost.
The new report comes on the heels of an earlier study that looked at the relationship between ADAS technology and claims frequency. The combined findings show that the change in claim severity in vehicles with ADAS were minimal; however, the decrease in claim frequency was significant. The study shows an overall reduction in loss cost by coverage, which can warrant ADAS feature-based policy discounts and benefits for both drivers and insurers.
Loss cost will vary depending on the combination of core ADAS features and how each specific combination of features performs, notes the report. For example, the analysis shows that ADAS features can result in a 14% reduction in property damage loss cost, a 23% reduction in bodily injury loss cost, and an 8% reduction in collision claim loss cost.
The researchers note one surprising finding from the study: For all types of insurance coverage there was a decrease in severity in ADAS-equipped vehicles as compared to those without ADAS. The researchers hypothesize the decrease in severity for liability coverages, for example, may be due to the fact that vehicles with ADAS may collide with less force — resulting in less damage to another vehicle, which would be a less severe property damage claim, or less injury to a third party resulting in a reduced bodily injury claim.
Insurance companies can use this new ADAS data as part of their rating segmentation and to improve policy rating, according to LexisNexis Risk Solutions. The new data helps show there is a distinct loss cost benefit, and VIN-level feature information is now available through a tool called LexisNexis Vehicle Build, according to the company. Insurers focused on total risk analysis can begin to understand the safety features on the specific vehicle in combination with the risk factors associated with the particular driver.