How Autonomous technology and Driverless cars could affect your fleet insurance

From January next year Vince Cable has announced that the UK Government will begin to allow testing of driverless cars on public roads. Countries such as Sweden, and the US are already well underway with such testing. Driverless technology currently utilises a number of features such as cameras, lasers, radars, GPS, cloud connections and links to local traffic control.

Autonomous Emergency Braking (AEB) is already being introduced by many manufacturers as well as lane departure warning and adaptive cruise control, with huge benefits to fleet insurance premiums. Despite predictions of driverless cars being available by 2020, Thatcham believe that true driverless cars being on the road are about ten to fifteen years away and will be introduced as a gradual growth of autonomous features within vehicles. In many ways we are already moving towards full vehicle autonomy with the introduction of technologies such as cruise control, lane control systems, and parking sensors, each where the driver is monitoring rather than constantly operating the vehicle.

How could this change your fleet insurance?

With the development of this technology comes both opportunities and challenges for the insurance industry. Driver error currently accounts for almost 90% of road accidents, paving the way for huge potential with autonomous technology to reduce accident risk and therefore your fleet insurance premiums.

Experts believe that autonomous features will help to reduce motor claims. AEB technology has already been credited for a 20% drop in the number of accidents on the roads and all new cars manufactured for the EU must be fitted with this new technology. Insurers have already acted to place huge emphasis on such technology by incorporating this component into the Group Rating process, providing generous savings to companies adopting fleets with this technology on board.

Autonomous technology should also work towards helping to prevent fraud with the use of on-board cameras and the ability to prove the number of passengers in a vehicle. Fraudulent claims are currently a huge issue driving up costs in the insurance market and with both fewer fraudulent and genuine claims attributed to driverless technology insurers will be able to offer more competitive, low cost fleet insurance premiums.

Cars with AEB technology do already have a lower insurance group rating and drivers are rewarded with cheaper premiums. Telematics and driverless technology are developing rapidly together and regulations such as the new ECall system, which is to be introduced to all cars from October next year, will help to automate a call to the emergency services with the vehicle’s location. Such systems could also be developed to notify your insurer immediately, bringing down the cost of third party claims resulting from delays in insurer notification. 

The question of Liability

Understandably, as with any technology, there is the risk of failure and there are still potential issues to be ironed out in terms of who will be liable in the event of an accident. Will this be the driver, the manufacturer or the technology supplier? There could be a shift in the industry from insuring the driver to insuring the elements of the car itself and moving towards product liability.

It is likely however, that in line with the development of increased automation within aviation, the driver will continue to remain liable if they have the ability to intervene and override technology.

The potential for a product liability shift will come from truly ‘connected’ vehicles where a driver is not expected to oversee or monitor the vehicle. This will mean that driverless cars will be able to communicate in real time with other vehicles on the road and the control of the vehicle shifts from human to computer. A drive towards connected vehicles would help with traffic congestion, but there are clearly concerns with technology failure, the need for high-quality internet connection, data security and cyber-attacks, as well as dealing with adverse weather conditions.

Clearly there are still many issues to be thrashed out between the insurance industry, vehicle manufacturers, technology suppliers and the legal community.