Thatcham Research, the insurer funded automotive risk intelligence organisation has announced the launch of the new Vehicle Risk Rating (VRR) system to improve the accuracy of vehicle insurability assessments. Developed with the motor insurance industry, this new model introduces a more comprehensive and dynamic framework for evaluating vehicle risks, evolving the longstanding Group Rating system.

The existing Group Rating model, which Thatcham Research has administered for over 25 years, delivers vehicle insight into the insurance process, forming the DNA of the vehicle being insured. This key information is relied upon by brokers, price comparison websites and insurers, which is then married with traditional driver specific aspects, such as claims history, allowing insurers to calculate premiums.

However, as the automotive landscape continues to undergo rapid transformation with the rise of electric vehicles, advanced driver assistance systems, and software-driven functionalities, Thatcham Research and its insurer Members recognised the need to modernise risk assessment.
 
The new Vehicle Risk Rating system uses market performance data, collected in collaboration with vehicle insurers, to account for dynamic factors such as advancements in technology, an increased focus on sustainable repair, and emerging theft trends. This offers insurers more granular insights into vehicle risks while supporting the Thatcham Research mission to enhance safe, secure, and sustainable mobility.

At the core of the Vehicle Risk Rating system are five assessments that provide a holistic view of each vehicle's risk profile:

• 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.

Each of these assessments is scored on a scale of 1 to 99, offering insurers a more granular understanding of vehicle risks and enabling more accurate, individualised insurance premiums for consumers.

Jonathan Hewett, Chief Executive, Thatcham Research comments, “Until relatively recently, insurers could rely on their historical experience of vehicle types, combined with driver data, to determine premiums. 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.”

One major positive of the new system is the emphasis on a vehicle’s ‘reparability’ – efficient, cost-effective vehicle repairs and prompt return to service post-collision – heavily influences insurance risk and, therefore, costs. The significant weight of the repairability assessment in the VRR score encourages vehicle designs and technologies that facilitate straightforward and economical repairs, something that often seem low on the priority list for vehicle designers at present. 

Thatcham Research will officially launched the Vehicle Risk Rating system on September 24th although a dual-rating period of 18 months during which both the new VRR and the existing Group Rating system will apply. This transition will allow insurers and manufacturers to adjust before VRR becomes the sole reference for vehicle risk assessment.

For more information about the Vehicle Risk Rating system and its benefits, please visit www.thatcham.org/pf/vehicle-risk-rating or contact comms@thatcham.org.