New U.S. Telematics Scoring Model Achieves 79% Lift Above Standard Rating Factors, Testing Available via LexisNexis Telematics OnDemand
LexisNexis® Drive Metrics Score Helps Provide Insurers Greater Risk Assessment and Pricing
LexisNexis® Risk Solutions, a leading provider of data, advanced analytics and technology for the insurance industry, has announced the launch of a new LexisNexis® Drive Metrics scoring model, a next-generation telematics-based scoring model for the auto insurance industry. This new scoring model will be available for testing through LexisNexis® Telematics OnDemand and is designed to flow seamlessly into insurers’ existing auto insurance ratings programs to help improve segmentation, pricing risk and profitability.
Telematics OnDemand will be the first LexisNexis® Telematics Exchange product to offer scores using the new Drive Metrics telematics scoring model which leverages analytics applied to driving behavior data. The resulting scores can help carriers deliver a more accurate risk assessment of driving behavior data, both at point of quote and renewal. Most importantly, it helps carriers with no prior experience with telematics to quickly leverage a large volume of driving behavior data which is accrued from more than 29 billion driving miles and hundreds of thousands of recorded claims.
This new scoring model is compatible with carrier-specific rating plans and delivers a 79% additional lift above standard rating factors, with the potential to increase future performance of the model even further as additional driving behavior attributes are included. The separation power of this scoring model is also very high with an 8.7x lift between top and bottom deciles in terms of claim frequency and performs strongly across coverage types to offer differentiated claim relativities and recommended discounts. While this new scoring model demonstrates strong performance, the data scientists at LexisNexis Risk Solutions consistently evaluate, innovate and recalibrate its Drive Metrics telematics scoring models to continually deliver market-leading performance of its models and scores.
With more individuals paying attention to their current driving habits or decrease in driving in some cases, the time is right to release this newest generation of telematics driving behavior models. In a LexisNexis Usage-Based Insurance (UBI) study, 88% of drivers indicated they prefer auto insurance pricing based on their actual driving habits. Furthermore, 71% of respondents noted that telematics and driving behavior data is among the fairest ways to set a price for the insurance if they perceive a benefit. With the new Drive Metrics scoring model, carriers can not only focus on pricing risk more accurately to improve their books of business, but also incentivize their customers who are participating in telematics data sharing programs through offering discounts based on driving behavior.
While insurance carriers are poised to see substantial improvements in predicting and analyzing driving risk, automakers can also benefit from the added scoring model to Telematics OnDemand due to greater demand and usage of telematics data sourced from automakers by a broader set of insurers and consumers.
For more information about the new Drive Metrics telematics scoring model and the associated eBook, click here.