A future-focussed view: how Swiss Re is making automotive underwriting smarter

A future-focussed view: how Swiss Re is making automotive underwriting smarter

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on 27 Nov, 2020

The automotive and mobility space is changing dramatically with an ever-growing flow of innovations, making our cars smarter, more connected and increasingly automated. What is the effect of these new technological advancements on automotive insurance? How can insurers quantify and factor in the impact of advanced driver-assistance systems (ADAS) on insurance premiums.

The Automotive and Mobility Solutions (AMS) team at Swiss Re has been driving innovation in the automotive insurance sector since 2016, supporting primary insurers, mobility providers and OEMs with the latest challenges in the automotive industry. These include; increasingly automated, connected and electrically powered vehicles, new mobility models, as well as the digitisation of sales and distribution channels. 

How to factor in the impact of car safety technologies on insurance
Over the last decade, automotive manufacturers have made substantial investments in car-safety technologies. Despite having a proven positive effect on road safety, the insurance industry is still struggling to quantify the impact of ADAS and thus take it into account when defining insurance premiums.

Some of the main challenges that insurers face when accounting for ADAS in their pricing strategies are access to granular ADAS data, as well as a lack of technical knowledge and infrastructure to assess the performance of such technologies and translate their impact into insurance terms. At present, most insurers still rely on standard demographic data (e.g. age, postal code, etc.) to set their automotive premiums, or a limited set of vehicle information, without systematic assessment of the car's safety features and the impact of these on insurance claims. 

To help insurers quantify the precise impact of ADAS, Swiss Re has developed its ADAS Risk Score.
Using robust statistical methodologies, the Swiss Re ADAS Risk Score gives a clear indication of how the safety performance of a vehicle is affected by its ADAS equipment. The score allows insurers to accurately translate these technological improvements into insurance tariffs and underwriting activities.

The science behind it
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