In this insight, we look at how autonomous cars are creating new challenges for insurers and how they can prepare for the many changes ahead.
Rapid advances in autonomous car technologies have taken some industries by surprise, not least governing bodies and insurers.
Autonomous car technologies will create radically different parameters from the established insurance model. As new legislation is pushed through and technologies become more sophisticated, ‘traditional’ ways of assessing risk are becoming obsolete.
While ‘traditional’ technologies were relatively easily to understand and categorize, more automated systems are complex and diverse, while the impact they will have on risk is harder to define. The speed of change in the automotive sector has also left insurers in the dark on important details, such as how advanced safety systems vary between brands and individual models.
Risk calculations need to take account of expensive hardware that is likely to be damaged in an accident. However, this could potentially be offset against a fall in the likelihood of an accident due to the many safety benefits of ADAS (Advanced Driver Assistance Systems).
Higher levels of automation bring the ability of the driver into question. At least in the short-term, this could lead to an increase in accidents.
With demand for over-the-air updates growing, the capabilities of a car can change dramatically overnight, potentially altering its behavior and levels of risk in numerous areas.
As levels of autonomy increase, the weighting of influencing factors will change. For example, the age of the driver will become less important, while the risk of a cyber attack could increase.
1. Act immediately to avoid being caught out. It is preferable to predict the effect of ADAS on claims, rather than waiting for real-world crash data to become available.
2. Create more proactive policies based on an understanding of new technologies. Cater for a broad spectrum of cars and drivers and adapt policies as technologies evolve.
3. Collaborate with vehicle manufacturers, suppliers and competitors. Better understand new technologies and create new channels to stay informed as cars change throughout their lifetime.
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