Advanced Driver Assistance Systems (ADAS) have improved automobile safety by minimizing the factor most frequently associated with car accidents – human error. The conventional 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 complex technical components and are often installed on exposed areas of vehicles, making them susceptible to damage from a collision.
This white paper examines the multivariate effect of ADAS features on claim severity. It is a follow up to our earlier report, ADAS Analysis Creates Path for Auto Insurance Rating, which analyzed the impact of ADAS systems on claim frequency. For both analyses, LexisNexis Risk Solutions considered the same sample of 11 million vehicles from model years 2014-2019, and reviewed industry-wide claims loss data for bodily injury, property damage and collision coverages. For this follow-up report, we looked at the interactions between a core list of ADAS features and quantified the claim severity differential across all 648 possible combinations of those features.
The combined results from the frequency and severity studies found that the core ADAS features equate to notable reductions in loss cost for bodily injury, property damage and collision claims, although loss cost will vary depending on the combination of features. These findings have useful implications for insurance rating and underscore the importance to insurers of having an awareness of the specific ADAS features that exist on a particular vehicle during the policy underwriting process.
Complete the form to the right to access the detailed findings in this new report, True Impact of ADAS Features on Insurance Claim Severity Revealed.
To access the 2020 report about claims frequency, click here.
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