• Bluedrop Insurance Blog
  • New LCV insurance group rating for 2016

    A re-structuring in the insurance group rating system for Light Commercial Vehicles (LCV’s) will come into place in January 2016. The current rating system, considered to be widely outdated, was delivered by Thatcham Research and was introduced over 20 years ago with no updates in the last 10 years.

    New LCV insurance group rating

    Following a detailed review, the bandings will increase from 20 to 30 to enable improved differentiation between similar vehicles, this will provide a more accurate reflection of risk and make it easier to reflect the presence of standard fit driver assistance system.

    The new system seeks to encourage and reward manufacturers for the standard fitment of innovative crash avoidance systems such as Autonomous Emergency Braking Systems (AEB), benefitting those fleets that choose safer, lower risk vehicles.

    Changes will come into effect as of the 1st of January 2016, following a similar change on cars in 2009 where groupings increased from 20 to 50. The increase in groupings will increase the sensitivity of the rating scale to clearly differentiate vehicle size and performance.

    All Light Commercial Vehicles which are grouped up until the end of December 2015 will stay under the existing system and will retain their current banding. Rather than running the system with groupings from 1-20, the new 30 group system will run groups from 21 to 50, to avoid confusion with the current 1-20 formula.  

    The new system allows for the introduction of an Autonomous Emergency Braking (AEB) assessment; a geometric bumper assessment; amended weighting on parts prices/repair costs; introduction of a ‘cost-based’ measure of ‘damageability and reparability’ (using independent external data); use of vehicle performance as a rating factor; increased loading for vehicle mass to better reflect the correlation between risk and vehicle mass in third party claims; an introduction of vehicle dimensions and a simplification of the security assessment.  

    As a result of these changes some vehicles will no doubt benefit from a lower grouping. Those with AEB as standard, low parts prices, and are easy to repair will feel the greatest benefit.

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