Autonomy and motor insurance: what happens next?

RSA Group

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RSA publishes report into autonomous vehicles and experiences from the GATEway Project

  • Automation set to improve the safety of our roads and efficiency of our transport
  • Closer partnership between insurers and manufacturers key to establish liability and handle claims involving new and complex technology
  • New data will be critical to develop underwriting and pricing models for a new context

RSA today (16 July 2018) launches Autonomy and Motor Insurance—what happens next?, a report looking at the impact of driverless vehicles on the motor insurance industry, drawing on its experience as the insurer to the GATEway Project (Greenwich Automated Transport Environment), a recent trial of autonomous vehicles in Greenwich, London.

Report

Autonomy and Motor Insurance—what happens next?

As the motor industry moves towards fully driverless vehicles, the report considers the role of insurers in providing cover for drivers and highlights how crucial data capture will be in determining liability in the case of accidents.

Human error to blame for over 90% of road deaths

There are over 31 million vehicles on Britain’s roads today, but according to the Department for Transport around 26,000 people were killed or seriously injured on the roads last year. 93% of those deaths are attributed to human error, which could be significantly reduced by automated driving technologies that have the potential to reduce incidences of traffic accidents and violations by eliminating driver error.

The aim of the GATEway Project was to understand how automated vehicles can help to address our future urban mobility needs, and the barriers to overcome before these vehicles become a reality on Britain’s roads.

RSA found that while the proliferation of autonomous vehicles could prove beneficial to drivers—as well as insurers—drivers need to be aware that current marketing of new assistance features can give the false impression of a level of autonomy not yet available.

The GATEway Project (Greenwich Automated Transport Environment) has seen hundreds of people try out driverless pods

As an industry leader, RSA is looking at the opportunities that automotive technology can bring, and evaluating how these developments will impact underwriting and pricing.

RSA’s involvement in the GATEway Project prompted a number of considerations that the business will seek to address as it develops insurance products for autonomous vehicles. These include:

  • Insurers will need easy access to data from autonomous vehicles, particularly in the event of an incident or loss. In a post-GDPR world, decisions will need to be made about the storage and ownership of data from autonomous vehicles, and how insurers can access and use this information;
  • Data has the potential to make liability easier to establish but it will be a point of debate as the insurance industry works more closely with manufacturers to determine whether a vehicle or driver was responsible in the event of an incident or loss;
  • Claims handling procedures will in the future need to consider the different kinds of claims driven by new technologies - for example, where the replacement of sensors, software and hardware elements is required;
  • Underwriting parameters may change drastically as current rate assumptions based on age, claims history, medical conditions, convictions and so on become less significant factors in a fully autonomous vehicle;
  • New rating methodologies will need to be developed as historic ‘big data’ on claims and trends become increasingly redundant;
  • Categories of cover currently offered typically to business customers, such as cyber risk cover, will likely need to be developed as a dimension of motor policies; and
  • Governments and regulators will need to be responsive to provide up to date guidance that keeps track with the rapid developments of technology—for example, the existing Highway Code was written for a different environment.

This is a time of rapid and unprecedented change for the motor industry, and [RSA is] delighted to take a leading role in understanding how insurers can respond to, adapt and influence that change to provide the best possible support for motorists.

Ian Kemp Commercial motor underwriting director, RSA

Commenting on today’s report, author Ian Kemp, commercial motor underwriting director, RSA said:

“Autonomous vehicles are no longer a space age fantasy; they are in our near future, and have the potential to make journeys smoother, more energy efficient and safer. It’s now the time to look closely at the opportunities and implications of these developments for insurers and their customers.
“As technology develops, we need to define clearly what constitutes an automated vehicle so we can properly assess the risks and provide appropriate insurance. The industry will need to be supported by a robust infrastructure and communications network, and updated regulations and legislation. As a wide spectrum of assistance and automation becomes available, is critical too that we take an active role in helping our customers to understand fully the capabilities and constraints of their own vehicles, and where liability in the event of an incident may lie."
"Autonomous vehicles are no longer a space age fantasy; they are in our near future, and have the potential to make journeys smoother, more energy efficient and safer" says report author Ian Kemp, RSA commercial motor underwriting director

He adds:

“This is a time of rapid and unprecedented change for the motor industry, and we are delighted to take a leading role in understanding how insurers can respond to, adapt and influence that change to provide the best possible support for motorists.”

Notes for editors

About the author

Ian Kemp, Charterer Insurer, ACII, MBA, MCIHT
RSA Commercial Motor Underwriting Director

With over 30 years in the industry, Ian Kemp is an experienced underwriting professional and has been responsible for the RSA commercial motor portfolio for the past eight years.

Ian is RSA’s lead in the Greenwich GATEway autonomous vehicle project and a consortium board member. The GATEway project trialled both AVP technologies and level 5 autonomous ‘pods’ around the Greenwich peninsula testing technology, user sentiment and the interaction between autonomous vehicles and pedestrians. Ian is also a member of the CIHT and sits of the ABI committee looking at future vehicle technologies. He is a regular speaker at industry events.

Ian has a fascination for all things motor and sees an unprecedented period of disruption and realignment ahead for the industry over the next five years, driven by increasing levels of technology, automation, shift in customer behaviours and societal level changes.

 

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