Exploring the Effects of Advanced Driver Assist Systems (ADAS) on Auto Insurance Modeling

The purpose of this study was to explore how Advanced Driver Assist Systems (ADAS) vehicle features affect auto insurance claim frequency, claim severity, and pure premium when included in a traditional ratemaking model. ADAS vehicle features such as lane departure prevention and pedestrian detection are an emerging but not fully understood set of technologies that are changing the risks associated with a vehicle. The lack of data around ADAS has prevented many insurance companies from offering pricing adjustments based on their use. By better understanding the relationship between ADAS vehicle features and claims losses, insurance companies can adjust pricing to gain a competitive advantage and incentivize safer driving.