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 autonomous vehicles insurance

autonomous vehicles insurance

Car insurance must evolve for autonomous vehicles

Connected vehicles, especially fully autonomous vehicles, are going to profoundly change the nature of car insurance – particularly the ways in which insurers assess risk and set premiums.
The insurance industry will have to work closely with manufacturers and others in the mobility sector to ensure that insurance regimes and policies are fit for purpose as the sector and its business models continue to be disrupted by developing technologies and new market entrants.
More than 90% of car accidents result from human error. The optimistic scenario is that the shift to automation will decrease the number of accidents dramatically, reducing risk all round. Manufacturers and their product liability insurers may face an increase in the proportion of claims they see relating to accidents – but should benefit from a fall in the overall number of claims as the risk of accidents decreases.
The challenge for insurers
The personal traits and behaviours of customers are currently critical factors when insurers set premiums. Insurers use a wide range of data including customer age, where they live and their history of accidents. Increasingly, insurers are also able to use information about individual usage gained through telematics or ‘black box’ technology. This provides insurers with a more accurate assessment of the risk, although it requires them to have systems and processes in place that are able to analyse and manage high volumes of data as well as ensuring compliance with data protection laws.
Insurers are developing their understanding of the legal implications around data ownership and data privacy in relation to the information they gain from telematics systems. This became even more important following a 2016 report by the Platform for the Deployment of Cooperative Intelligent Transport Systems (C-ITS), which recognised that vehicle identification could amount to personal data.

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