Transitioning from Group Rating to Vehicle Risk Rating
The current 1-50 Group Rating system, which assesses vehicle risk based on 125 vehicle attributes, is being replaced by a more advanced and dynamic five assessment based Vehicle Risk Rating model.
Each assessment, including Performance, Damageability, Repairability, Safety, and Security, will be scored from 1 (indicating low risk) to 99 (indicating high risk). The scores are using real-world claims data and aggregated to provide an overall insurance risk score. Considering multiple factors of each assessment, this scoring system offers a comprehensive view of vehicle risk.
Vehicle Risk Rating Assessments
The Vehicle Risk Rating Assessments are a comprehensive framework based on five interconnected assessments designed to provide a holistic view of a vehicle’s risk profile.
Performance:
The first assessment concerns Performance and vehicle characteristics, including acceleration, top speed, and list price, as well as the impact of innovative drivetrains and power systems and associated insurance risks.
Damageability:
The second assessment, Damageability, assesses how vehicle design, materials, and construction techniques affect the severity and cost of repairs based on rigorous testing protocols.
Repairability:
The third assessment, Repairability, examines the availability of a transparent and accessible repair strategy including cost of parts, encouraging vehicle technology advancements to feature practical, cost-effective repair processes.
Safety:
The fourth assessment, Safety, encompasses an in-depth analysis of crash avoidance systems and other relevant attributes such as kerb weight to provide a view of a vehicle’s active safety profile.
Security:
The fifth assessment, Security, stems from Thatcham Research’s New Vehicle Security Assessment (NVSA), an internationally recognised and understood measure of systems and technology implemented to protect vehicles from theft and unauthorised access, considering both physical anti-theft devices and digital security protocols.
The shift in vehicle technology and the need for an updated vehicle risk assessment model
The automotive industry is undergoing a profound transformation, shifting from predominantly mechanical and hardware-defined systems to complex software-defined systems. The emergence of these advanced vehicle technologies presents intricate challenges to conventional approaches to vehicle risk assessment.
New materials and manufacturing techniques aimed at reducing weight and increasing stiffness introduce new challenges in terms of repairability, impacting the overall risk profile of vehicles. Moreover, the increasing connectivity of vehicles to the internet and each other introduces cybersecurity threats that pose new challenges for vehicle security and data privacy.
The gradual integration of automated driving technologies presents unique risks related to system reliability, decision-making algorithms, and human-machine interaction. Risk is moving from the driver to the vehicle; therefore, how we measure and define risk has to change.
By accounting for the complexities of today’s automotive innovations and the subtleties of emerging risks, the Vehicle Risk Rating model offers a more comprehensive and accurate assessment of vehicle insurability.
Developing Vehicle Risk Rating
Thatcham Research, in a collaboration with a Thatcham Member Insurer Working Group and the Group Rating Panel, conducted an 18-month study to evaluate the statistical significance of various vehicle data points on insurability.
Vehicle evaluations are carried out at the Thatcham Research facilities in Berkshire and Nottinghamshire, UK. Each new vehicle undergoes a comprehensive assessment, examining all aspects of the five assessment system. The selected model for evaluation is typically the best-selling one in the UK market with an average level of onboard technology. This approach ensures that the Vehicle Risk Rating accurately represents the typical risk profile for similar vehicles on UK roads.