The China Automotive Technology And Research Centre (CATARC) will work with the UK’s Thatcham Research – which administers the UK insurance rating system on behalf of the Association of British Insurers – to develop and introduce a similar system in the Chinese market.

Thatcham added that the Chinese motor insurance market is currently undergoing structural change, moving away from the market level pricing tariffs which are common in Asia, towards individual risk assessment by insurers. This provides an opportunity for CATARC, working with Thatcham, to help provide a workable solution.

As part of the agreement, Thatcham will also provide consultancy services including vehicle inspection, assessment and training expertise, as well as ongoing support in developing an appropriate risk rating formula that could effectively operate in the region.

Neale Phillips, strategy & development director at Thatcham Research, said: “If you want to manage vehicle risk, you first need a clear understanding of the different factors that can have an influence. The sheer number of trim variations even on the same basic vehicle can be enormous and all need to be factored in.”

He added that the materials used in construction, the cost of replacement parts, crash performance, security levels and the fitment or otherwise of life saving driver assistance technology can all vary widely, often dependent on the territory into which the vehicle is sold.