17 July 2019

Driverless cars and the future of motor vehicle insurance

It might seem like a distant concern, but a driverless vehicle future is approaching rapidly, with industry giant, AXA’s technical director David Williams suggesting “production-available driverless cars” will be on the streets by 2021.

While the extent and time frame of adoption is yet to be seen, the one universally agreed inevitability is that autonomous cars will still have accidents.

This prospect poses some interesting challenges for insurers; not least, what is the risk for their commercial, retail and injury divisions? Will individuals still be responsible? And how do you determine parties at fault?

Crombie Lockwood was at the 2019 Insurtech Summit in Sydney, looking at how autonomous vehicles will revolutionise the automotive landscape, and what that means for advice on motor vehicle insurance. 

A popular rationale presented by Suncorp’s autonomous vehicle expert, Steve Cratchley, was a roadmap of coverage that evolves with the technology. From the traditional “I drive” model we currently know, to a “we drive” model where vehicles present partial autonomy, (already present on our roads in premium products from the automotive industry) and a “car drives” insurance model where the human element is almost redundant. The overlap of solutions between each stage would be years, potentially decades.

Motor insurance models will evolve as autonomous cars will still have accidents.

Access to vehicle data will speed up claims 

The future of accident assessment and claims will evolve suggests Cratchley. “Permission and partnership with customers around access to (vehicle) data will provide the real opportunity to remove ambiguity around fault determination after incidents” he says.

This will also improve outcomes for customers via faster claim processing.

Insurance firms will also become much closer to the vehicle manufacturers. Currently access to emerging data from developers is a challenge that is impacting the insurance industry’s ability to forward plan. This will need to improve so more robust risk strategies can be formulated. That growing dependency on data will also drive increased scrutiny on data privacy and cybersecurity.

While there are many variables forming how the insurance industry readies itself for driverless cars, one common thread prevailed at the Insurtech Summit; that meeting the needs of customers will always be the priority and ultimately that will always transcend technology.