ISO has introduced a new policy manual rule and rating factors to help auto insurers underwrite and price coverage for the growing number of cars with advanced driver assistance systems (ADAS). ISO provides forms, rules and rating information for the property/casualty insurance industry.
“Over the years, we’ve seen an increase in vehicle safety technology, such as blind spot intervention, lane departure prevention, and forward collision warning,” said Jared Smollik, vice president of personal lines actuarial and analytic products at ISO. “Our new rule and rating factors will help insurers apply real-world experience with this technology in support of actuarially sound risk selection and pricing.”
The new manual rule and related rating factors apply to the ISO Personal Auto Program. The rating factors are based on an actuarial analysis that included a review of loss data reported through the ISO Personal Auto Statistical Plan, ISO said.
A key finding of the analysis showed that ADAS features have reduced accident frequency, but the effect is somewhat offset by the expense of repairing vehicles with ADAS technology after an accident.
“ISO currently expects collision experience to improve with time as more vehicles with ADAS features hit the road and frequency of accidents continues to drop,” continued Smollik. “Meanwhile, as these features become more common, economies of scale in producing associated sensors and other parts may reduce their cost.”
To complement the release of the new rating factor, Verisk also offers VINMASTER -VINterpret Safety. It provides electronic delivery of ADAS information using a 10-digit vehicle identification number (VIN), helping insurers determine which vehicles have certain ADAS technology as standard or optional features.
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