The cost of vehicle ownership has increased almost 13 per cent since 2016. Coupled with higher fuel and finance costs, the rising cost of insurance contributes to that figure – something that insurers are acutely aware of. Sam White, CEO of Pukka Insurance, says “Underwriting at the moment is just a series of proxies. I’m trying to find out how good a driver you are. And if you have a claim, how much is it going to cost me?”
Current calculations rely heavily on assumptions; intelligent estimates based on a myriad of data, enriched by cross-referencing points from data providers, such as LexisNexis. The latter has just given the UK insurance market, 95 per cent of which it serves, Vehicle Build data including any advanced driver assistance system (ADAS) technologies fitted as standard when the car is built.
Martyn Matthews, senior director of personal lines at LexisNexis, says: “The insurance market is a large consumer of data in general terms. We can now help insurers with a greater level of granularity of information about a vehicle. Using the vehicle identification number (VIN) to establish what safety features are actually on that vehicle helps them establish the risk price for the customer.”
The availability of this data isn’t new, however. David Williams, managing director of underwriting & technical services at AXA Insurance UK, explains: “We do 12 million quotes per day, with 80 per cent of our business coming through comparison sites. Before, the cost per look-up for each quote was prohibitive, the information wasn’t always complete or available immediately.”
The nature of comparison sites means insurers are restricted in what they can ask the consumer and how quickly they need to make a calculation. Automation, like LexisNexis Vehicle Build, is most certainly helpful, but it’s not the full picture.