How Price Digests’ Retained Value Data Gives Insurers a Hidden Advantage

 In Price Digests Blog

For three years, Price Digests has held the annual Highest Retained Value Awards (HRVAs). The HRVAs recognize the commercial truck models projected to retain the highest percentage of their original value during the next five years.

Truck buyers see the HRVAs as a valuable resource to inform their buying decisions. But Price Digests’ retained value calculations can also be a valuable tool for insurers, both carriers and agents. Here’s how our data sets complement existing analytics to reduce risk and improve the customer experience.

Insurers May Be Underestimating Replacement Costs

Original Cost New (OCN) is one of the most important data points used to calculate commercial truck premiums and replacement costs. With availability of commercial trucks at record lows, finding comparable used models is extremely challenging. When an owner needs to replace a vehicle, they may opt for something new or much more costly than originally accounted for.

This increases insurers’ risk, especially since OCN data doesn’t always accurately reflect the true cost of various truck configurations. According to Price Digests Product Manager Ken Rossiter,  insurance underwriters should be aware of the importance of valuing the full truck, and how retained value over time plays a role in those valuations.

While insurance carriers already have sophisticated data capabilities at their disposal, accessing proven independent data that incorporates current market conditions can provide an advantage by helping  address these issues.

Price Digests Retained Value Data Can Fill the Gap

At Price Digests, we monitor the marketplace and analyze millions of data points each month on commercial truck values and sales activity. In addition to our cost and market activity data, we track broad data sets that allow insurers to increase their data insights without increasing the burden on their internal teams.

We calculate the HRVAs based on market depreciation standards and proprietary algorithms that insurers can use to set rates more effectively:

  • Use retained value as a tool for benchmarking to validate your internal data.
  • Get a comparison of the total cost of replacing a truck in the future.
  • Understand how the used market will impact the cost of new vehicles.

Retained value data also helps agents become more transparent to customers. When they understand that a vehicle has high retained value, they can feel more comfortable with the terms of the policy. That makes for easier decision-making and faster purchases.

Our data has proven to be reliable. As we approach the fourth year of the HRVAs, we’ve seen that previous winners have held their value as we predicted.

Prevent Premium Leakage and Provide a Better Customer Experience

By adding Price Digests’ residual value insights to your data set, you can mitigate risk and provide a better customer experience. The sheer volume of data available today can be unwieldy, even for insurers with advanced analytics capabilities. We do the heavy lifting so you can identify some of the causes of premium leakage and refine the way you set rates. We’ll be announcing this year’s HRVA award winners soon. Stay tuned!

About Price Digests

Since 1911 Price Digests has served the vehicle data needs of the insurancefinancegovernment, and dealer markets through its portfolio of VIN decoding, specifications, and market value data solutions for the commercial truckpassenger vehiclemarinepowersport, and recreational vehicle asset classes. Our data + intelligence solutions pave roads to faster and better decisions with perfect-fit data delivery, whether it’s seamlessly integrated APIs, online subscriptions or custom data delivery.

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