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Auto Insurers
Swiss Re: Technology Will Eliminate Traditional Underwriting Factors

The company says its scoring system can eliminate using credit scores, gender and garage addresses to calculate an insurance premium.
  • Anthony Bellano
  • October 2022
ALL SYSTEMS READY: Latest onboard/navigation data display installed in a 2022 Toyota Tundra. (Photo courtesy of Toyota North America)

ALL SYSTEMS READY: Latest onboard/navigation data display installed in a 2022 Toyota Tundra. (Photo courtesy of Toyota North America)

Key Points

  • Knowing the Score: Swiss Re has developed the ADAS Risk Scoring System, which uses information gleaned from Advanced Drivers Assistance Systems, to help insurers understand how to set more accurate rates.
  • European Application: BMW and Toyota are the first two manufacturers to use Swiss Re’s ADAS Risk Scoring System. It is currently available only in Europe.
  • Tech Update: As cars have changed with technology, so should insurers’ long-time practice of using risk proxies such as age, location and claims history, said Swiss Re’s Andrea Keller.

Insurers have had a long-time practice of using risk proxies such as age, location and claims history to set rates and coverage in auto insurance. But as cars have been changed by technology, so has insurance.

Swiss Re has developed a risk scoring system, using information from car manufacturers' Advanced Drivers Assistance Systems, that helps primary insurers understand how to offer more accurate rates, said Andrea Keller, head of Swiss Re Automotive and Mobility Solutions, a branch of the reinsurer that looks at innovation.

ADAS measures factors that include automatic emergency braking and lane departure warnings, among other factors. The individual companies decide what data they will collect, and how that data will be used.

Related: At a Glance — Auto Insurance Initiatives

“With highly automated vehicles that you have on the road today, the car might replace you in braking maneuvers if you get too close to the car in front of you, and it's not you really making that decision,” Keller said. “Cars take away driving tasks from drivers.”

How It Works

Swiss Re examined the various ADAS present in the cars used by their partner companies worldwide. They looked at their capabilities in different traffic conditions under various conditions. They considered safety and the cost of repair. They take into account data from the manufacturers, the insurers on claims experiences in their portfolio, as well as data from their other partners, such as test centers, to determine the score, Keller said. The score acts as a complement to companies' existing rating models.

Collectively, Keller said their insurers have told Swiss Re they've been able to improve claims prediction from 5% to 35% for more than 65% of the policyholders in the tested portfolios.

Swiss Re first rolled out the ADAS Risk Scoring System through a partnership with BMW in 2019. At the time, Swiss Re was looking to partner with manufacturers that were actively developing ADAS. Their partnership was the result of having a “similar pain point,” Keller said.

BMW has installed ADAS in their vehicles since 2012, but they hadn't seen their insurance partners or insurers in general actively using that data in their calculations, Keller said. As a reinsurer, Swiss Re was hearing questions from primary insurers about how these emerging trends would impact auto insurance.

“So we really came together because we had that same understanding that it could be powerful to engage in a cross-industry partnership where we get some insights from the engineers on how cars are built, how safety systems can prevent accidents,” Keller said.

In 2020, Toyota partnered with Swiss Re to make the scoring system available in Toyota and Lexus vehicles, initially in Europe. The system is not yet available in America, but Toyota understands the insurance challenges presented by these developing trends. “Automated driving changes the whole nature of the insurance that's being considered,” said Toyota Insurance President Will Nicklas. “There are many considerations that have to go into the type of insurance product that we'll be able to provide for autonomous cars, and we're researching what that insurance is going to look like.”

Related: Automakers Build New Insurance Future

He also agreed with Keller's assessment on the need to change the way insurers cover drivers.

“I think every algorithm out there is using hard braking, hard acceleration, hard cornering,” Nicklas said. “But then, mileage is a factor in some of the algorithms. Just how much you're driving is indicative of the opportunity to have an event. Some of the algorithms use time of day. The ultimate goal is to eliminate some of these traditional underwriting factors. If we've got a great algorithm that really is indicative of someone's driving skill, and their ability, we can eliminate the credit score in calculating an insurance premium. Eliminate gender. Eliminate garage address. These are some of the things we're looking at so that we can offer a really fair way to underwrite insurance.”

In the United States, Toyota equips every car with a data communication module that can collect driving data that can be shared—at the customer's request—with the carriers Toyota Insurance works with. “We're empowering customers who opt in the ability to use their data to save money on insurance,” Nicklas said. “Carriers appreciate the accuracy of data being shared, and customers appreciate the ability to use the data to their own benefit.”

As for Swiss Re, Keller said the reinsurer's initial goal was to build partnerships with as many original equipment manufacturers as possible, but they also understood that it takes time to establish these partnerships and get them live. “A lot of the development we've done is to create what we call a more universal risk score, so we're now able to give risk scores on ADAS systems not just for BMW and Toyota, but for 95% of all brands globally,” Keller said.

That universal score is based on research from Swiss Re's test track partners, the portfolio analysis it does with insurers and other data the reinsurer's partners have provided. The score has also expanded over time, taking into account a growing number of factors.

“I think that's been a big development step in terms of what we can offer to the insurance industry,” Keller said. “If we can cover the majority of their portfolio, the risk score is much more attractive for them to implement into their insurance programs.”

Swiss Re offers portfolio analysis consulting based on its risk scoring system to several corporations across the globe, ranging from the United States to Australia.

Related: For Tesla, Telematics Provides a Battery of Information for Insurance

“We also have programs with insurers leveraging our scores in their point-of-quote process,” Keller said. “For example, one client we just announced is Wefox in Italy that is leveraging our ADAS risk score as part of their rating models.”

Each insurer uses the score system differently. “Some use it for growing in certain segments,” Keller said. “Others use it to improve loss ratios or just portfolio steering, so it really depends on the individual use cases.”

Swiss Re has added a score that specifically shows insurers how covering electric and battery-powered vehicles is different from insuring combustible-engine vehicles.

“A much larger share will be electric vehicles, especially markets like Europe or China. We will look at not just ADAS, but all technology in the vehicle and how that impacts the motor risk,” Keller said. “We are expanding it into an AV risk framework, guidelines for insurers so they can understand how to price fully autonomous vehicles or highly automated vehicles where the driver itself doesn't make a difference on the risk profile anymore.”

Anthony Bellano is an associate editor. He can be reached at

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