UK car insurance groups axed for new Vehicle Risk Ratings
The car insurance industry has launched new Vehicle Risk Ratings, to give new insight into car insurability and costs
The long-established car insurance group rating system is being replaced with a new system assessing new cars for the five core characteristics of performance, damageability, repairability, safety and security.
Under the new scheme, every car going on sale in the UK since 1 August this year is being awarded Vehicle Risk Ratings in each of the five categories listed above. The move is designed so insurers can provide a more ‘granular’ level of risk assessment for ever-more complex cars and associated technology, while it’s hoped that consumers will be able to understand in more detail where individual models perform better or worse. Additionally, as has happened with the Euro NCAP safety programme, it’s hoped that focusing attention on the relative strengths and weaknesses of different models in key areas, will encourage manufacturers to respond and improve areas where they may be uncompetitive.
Each of the five risk ‘pillars’ will generate a Vehicle Risk Rating from 1 to 100, with a higher number indicating a higher level of risk. One of the core pillars, ‘repairability’, is an entirely new assessment that examines the availability of “a transparent and accessible repair strategy”, the industry says. Additionally, whereas the existing car insurance group ratings have always been fixed at a vehicle’s launch, the new Vehicle Risk Ratings will be dynamic, so can respond to a changing risk profile with ongoing vehicle development.
“Until relatively recently, insurers could rely on their historical experience of vehicle types, combined with driver data, to determine premiums,” says Jonathan Hewett, chief executive at Thatcham Research, the insurance risk intelligence company which is masterminding the switchover. “This is no longer viable in today’s fast-paced environment where it’s important to understand the influence of rapidly developing ADAS on accident frequency and severity, the impact of new security technology in staying ahead of the criminal gangs and the challenges electrification and new vehicle structures present to sustainable repair.
“In a technology driven world, research and vehicle focused assessments are vital to informing this process, enabling insurers and their partners to see the road ahead with absolute clarity and confidence,” he adds.
A Thatcham spokesman told Auto Express the new rating regime would benefit consumers too, as it will bring insurance into line with other consumer products by unpacking the individual elements that contribute to risk. He pointed to the mobile phone market as an example, where a buyer might compare aspects such as screen resolution, battery life and user interface when choosing a product.
“Cars on sale after 1 August will have an overall figure, and vehicle manufacturers will be able to break that down into five pillars and showcase performance in those areas,” he said. “It’s up to the car manufacturers to make that data accessible, and we’re working with them on that.”
Aside from the five individual scores, a single overall Vehicle Risk Rating will be generated, which for the next two years can be used by insurers to generate quotes while computer systems used to 2-digit Group Ratings are brought up to speed. After two years, all insurer and related systems should be ready to integrate with the five VRR assessments, ensuring policies and premiums will be offered that take into account a much broader range of vehicle characteristics.
Thatcham Research, which has masterminded the changeover, is also keen to stress that the 2-digit VRR numbers that will form the basis for premium costs over the next two years, should not be compared with the old group rating numbers. That’s important as models that went on sale prior to 1 August received a group rating as before, and the new assessments won’t be applied retrospectively to older vehicles.
“The plan after two years is to have the five ‘pillar’ scores individually respected by both car manufacturers, the government, the insurers and consumers,” the spokesman said.
What are the core five Vehicle Risk Rating assessments?
- Performance – Evaluates vehicle characteristics such as speed, acceleration, and the impact of modern powertrains.
- Damageability – Assesses how design, materials, and construction influence repair costs and damage severity.
- Repairability – Focuses on the ease and cost of repairs, encouraging repair-friendly vehicle designs.
- Safety – Analyses active and passive safety systems, including crash avoidance features.
- Security – Examines physical and digital security measures, leveraging Thatcham Research's New Vehicle Security Assessment expertise.
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