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Right now motor manufacturers are gathering huge volumes of data on driving behaviour from their vehicles - data that is invaluable for insurers to determine how the risk changes across the different level of autonomy
Depending on who you listen to, driverless cars could either herald a utopian future of accident-free roads and stress-free commutes or a nightmare tomorrow, where cars are in log jams or hacked by criminals with the driver still inside. Which scenario plays out remains to be seen, but autonomous vehicles are coming and they are set to shake up the insurance industry.
In her speech at the State Opening of Parliament on 18th May, The Queen announced a new Modern Transport Bill, which aims to guarantee the provision of suitable insurance for autonomous vehicles. A matter of days later, Roads Minister Andrew Jones announced that a consultation would open this summer on insurance cover for driverless vehicles and challenged insurers to “innovate, to develop new products, partnerships and approaches”.
The consultation is part of the Government’s plans to amend the Road Traffic Act 1988 motor insurance provisions to extend mandatory motor insurance to include product liability. In essence it will extend compulsory motor insurance to cover product liability so that in the event of a collision caused by a fault with the vehicle in driverless mode, the insurer would be able to seek reimbursement from the manufacturer.
The challenge for insurers when it comes to semi and fully autonomous cars is that they have no historical data to refer to for these types of risks.
To underwrite insurance cover, they need to understand the human behaviours in response to the technology both actively and passively, through all levels of autonomy. It’s a big hurdle but it’s by no means insurmountable if you consider that telematics technology is already delivering driving behaviour data to insurers, giving them greater insights on customer behaviour, supporting underwriting decisions and claims.
Right now motor manufacturers are gathering huge volumes of data on driving behaviour from their vehicles - data that is invaluable for insurers to determine how the risk changes across the different level of autonomy.
At a base level, it will enable insurers and manufacturers to identify in the case of an accident whether the technology installed worked in the way expected and the role that the human or no human intervention played. This will help them make a judgement on the fault of the claim and who is responsible.
It therefore makes sense for insurers and motor manufacturers to work together to share their data and learnings for the benefit of all parties. This exchange would provide actuaries and underwriters with access to a large amount of quality data in order to calculate risks accurately and identify emerging trends.
The future of driverless cars in the UK relies heavily on the driving data that can be obtained and understood from those vehicles. Insurers have an opportunity to get ahead of the game to develop innovative solutions that cater to the new market and keep customers protected, no matter who is or isn’t behind the steering wheel.
Rutger van der Wall is Vice President, International Business Development for LexisNexis Risk Solutions. In this role, he leads the international efforts for all Telematics offerings as well as bringing new capabilities to the Global Telematics offering. His experience comes in part from a diverse career background comprised of domestic and international experience, exposure to product introductions in established and emerging markets, and firsthand knowledge of Telematics solutions. ?? Rutger joined LexisNexis in 2002 and advanced to his current position in early 2014 after serving for three years as VP Global Legal Software Solutions based in the US and four years as the company’s managing director of The Netherlands, Belgium, Germany and Emerging Markets like Russia, the Middle East and Latin America.