Thatcham Research’s VRR is set to reshape UK insurance

VRR breaks the mould with its five-pillar structure, offering a multi-dimensional view of risk. “This isn’t another hoop for carmakers to jump through,” said Townsend. “We’ve brought in individual pillar scores so the vehicle manufacturers can understand how they can reduce the risk in those areas. But insurers can also understand the real risk they’re having to insure.”

Launched in August 2023 and now encompassing over 600 vehicles, the system has already proved valuable to both underwriters and vehicle brands. It provides a far clearer picture of the financial risks insurers face, not just due to performance but to parts costs, availability, collision repair time, and safety data.

A manufacturer’s perspective

Victor Zhang of Omoda and Jaecoo explained how Thatcham Research’s system has impacted its UK strategy. “From day one, our goal has been to retain customer trust and ensure our products are competitive in the long term,” he said. “The introduction of VRR helped us bridge the gap between engineering priorities and real-world insurance outcomes.”

Zhang outlined targeted changes made in response to Thatcham Research’s feedback: reinforcing rear crash structures, integrating a Category 1 alarm system, and building a £3 million parts hub in Coventry. The changes weren’t just theoretical; they brought Jaecoo’s insurance group ratings down dramatically, from the low 30s to the low 20s.

“It’s not just about the numbers,” Zhang said. “It’s about market confidence.” Improved Vehicle Risk Ratings have helped the brands gain traction with leasing companies and fleet buyers, whose decisions often hinge on predictable running costs and after-sales efficiency.

The insurer’s view

Admiral’s Scott McCammon highlighted that insurers assess vehicles across four dimensions: safe and high-quality collision repair, efficient customer journeys, cost control, and support for sustainability. The reality is that many modern vehicles still fail on one or more of these points, particularly new entrants with limited supply chains or collision repair methods.

“In some cases, we’re writing off cars that really should be repairable,” said McCammon. “I think it’s great Thatcham Research is doing this [VRR] and bringing it to the fore. I think that’s a real positive.”

This shift also highlights the growing role of sustainability within the claims process. Where unnecessary write-offs used to be a necessary evil, VRR opens the door to more collision repairs, and reduced environmental costs.

Real-time, real-world data

Among VRR’s strengths is that it creates a structured, shared language for OEMs and insurers. The system is intentionally collaborative, not punitive. By separately scoring damageability and collision repairability, VRR highlights both design-time choices and aftersales execution.

“We want the right information getting to the right people so that engineers can make the right decisions,” Townsend said. “We can very quickly identify where problems may be. It enables us to have collaborative conversations directly with vehicle manufacturers.”

This approach allows new OEMs to build trust faster and helps insurers anticipate risk more effectively.

Crucially, it also bridges the gap between UK collision repair expectations and overseas norms. In China, for example, collision repairs are often cosmetic, and labour is cheaper. UK insurers, by contrast, are required to return cars to their pre-accident condition, which is a vastly more demanding and expensive standard. VRR makes that disconnect visible.

Unlike the static Group Rating model, Vehicle Risk Rating (VRR) is dynamic. Scores are updated as real-world data emerges. That matters especially for high-tech areas like ADAS and EVs.

A case in point: a windscreen replacement, once a £400 driveway job, now costs £1500 or more due to sensor calibration, lidar installation, cameras and other high-tech needs. VRR captures those shifts.

The system is already proving useful in identifying red flags. Where parts aren’t available in-region or safety data is limited, the collision repair score reflects that. If a particular part regularly leads to a write-off, it will affect future scores.

Zhang explained that this transparency helped fast-track product changes and improve customer satisfaction. Omoda and Jaecoo now treat insurability as a core design input. The benefits are circular: better engineering leads to better scores, which leads to lower premiums and better consumer perception.

And because VRR is based on engineering attributes and test data rather than historical claims, it levels the playing field for new entrants. “The Vehicle Risk Rating process asks questions at launch, and where maybe some steps haven’t been addressed, the VRR process highlights that to the vehicle manufacturer and the insurer, and those risks can then be managed,” Townsend said.

This is especially important for fast-moving electric vehicle startups or overseas brands with limited UK presence. VRR allows them to stand toe-to-toe with established OEMs, providing they engage early with risk criteria.

Zhang echoed this: “These improvements have made engaging with the fleet customers and leasing companies easier. The smoother claims process and the more predictable cost of ownership directly impacts consumer satisfaction and retention.”

Scott McCammon issued a note of caution. “We are definitely seeing growing pains from these new entrants, which we can manage on an ad hoc basis,” he said. “It’s fine, but it’s quite labour-intensive, and it’s not scalable.”

That’s where VRR’s industry-wide framework can help. “When exceptions become the norm, that’s when that complex ecosystem starts to break down,” McCammon said. “This new Thatcham Research approach promotes a higher level of collaboration across the whole industry, making that whole process slick.”

He added that the insurance industry is evolving from a largely data-driven model to one that combines claims history with practical collision repair insights. Feedback from bodyshops, methods from Thatcham Research, and OEM input are all increasingly integrated.

The future of risk

By providing five separate scores per vehicle, insurers can prioritise based on what matters most to them, from security for city-based customers to collision repairability for rural drivers. This flexibility helps insurers refine their pricing and underwriting. VRR also helps manufacturers align with these market needs from the start. The system rewards not just safety and performance, but logistical readiness and collision repair simplicity.

And as Townsend confirmed, more real-world data, including theft rates, will soon feed into the scoring.

Looking ahead, Thatcham Research is also exploring how dynamic collision repair challenges, such as ADAS recalibration, battery safety procedures, and even green part availability, can be more formally incorporated into future updates.

The panel discussed hot topics like the growing (but limited) role that green parts play in collision repairability, particularly EV battery repairability. While initiatives like certified battery refurbishment are gaining traction, much work remains.

McCammon explained that even when parts and methods are technically available, safety concerns can prevent collision repairs from going ahead. “I don’t see many technicians who are willing to start dismantling battery cells and replacing them,” he said. “Even if we have parts, methods and qualifications, there’s still a nervousness.”

Due to poor parts availability, there’s also the challenge of writing off vehicles over relatively minor faults, such as a cracked bumper or a misaligned sensor. VRR shines a spotlight on those pressure points.

While reclaimed parts are growing in popularity, many insurers remain cautious due to liability and warranty concerns, although OEM certification or recertification may become the norm. That could represent another future frontier for industry-wide collaboration.