CRIF Launches Cost-Reducing Traffic Exposure Score
CRIF has introduced the Traffic Exposure Score in the UK, a service designed to enhance the precision of insurance underwriting by incorporating detailed traffic flow data. This launch comes at a point when motor insurance premiums have jumped by 46% over the past year, prompting concerted efforts from the Association of British Insurers (ABI) to curtail rising costs.
The Traffic Exposure Score by CRIF provides insurers with advanced tools to refine their risk assessment processes. By integrating granular geographical information about traffic density, daily commutes, and potential road hazards, insurers can now formulate more accurate pricing strategies. This data-centric approach goes beyond traditional underwriting methods, which often rely on generalised area-based risk assessments.
Data for Smarter Underwriting
Using a mix of open, proprietary, and third-party data sources, CRIF’s service estimates the likelihood of accidents for individual drivers based on their specific geographical locations. The score ranges from 1 to 14, with higher values indicating greater risk, factoring in the density of traffic-related points of interest, socio-demographic profiles, and the character of different neighbourhoods, from city centres to suburban zones.
The spike in insurance costs, driven by increased repair and part expenses, has not correspondingly improved profit margins for insurers. Sara Costantini, CRIF’s Regional Director for the UK & Ireland, says "Similarly for insurers, the rising cost of repairs and parts have driven up premium costs without necessarily increasing margins. The need to utilise data and analytics to take account of external factors like traffic conditions and the type of areas people drive in have therefore never been more crucial."
“With the launch of CRIF Traffic Exposure Score in the UK, we’re aiming to help the insurance industry to utilise the potential of granular statistical data to make better, more accurate decisions when insuring motorists. With this, we can help increase the accuracy of premiums for motorists, while helping lower costs for those drivers who are found to live in low-risk areas.”
In other European countries, the introduction of the Traffic Exposure Score has demonstrated its value, improving insurers' loss ratios by 1.5% to 2.5%. In the UK, this tool promises not only to make insurance pricing more reflective of actual risks but also to offer relief to drivers in lower-risk areas, who may otherwise be overpaying due to less targeted risk assessments. CRIF has also opened into banking services and the recent launch of ESG Analytics.
For the insurance industry, already grappling with narrow margins amidst rising costs, the ability to pinpoint risk more accurately is a significant advancement. It allows insurers to better manage risk, set premiums more fairly, and ultimately, sustain their business in a highly competitive market.
As this service takes root, the potential benefits extend beyond immediate financial gains for insurance companies. For drivers, particularly those in historically overcharged regions or demographics, this represents a path towards more equitable, affordable insurance options.
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