Insurers role in moving consumers towards autonomous technology, explored by Graham Jarvis.

While the British government, among other across the globe, is putting its faith in an autonomous vehicle future, consumers are maintaining a certain degree of opposition to this technology. Southampton University reported in September 2017 that it had joined forces with comprethemarket.com to future-gaze, and they found that 73% of Brits oppose driverless cars because they believe they could malfunction.

A further 72% of the respondents claimed that they couldn’t trust a computer with car safety (and that’s even though many people fly on holiday in fly-by-wire aircraft that use information technology for this purpose). Subsequently, 68% of them want to have full control of their vehicles despite the industry-proclaimed improvements in safety of autonomous driving.

Contesting claims

The commonly touted claim is that the artificial intelligence within driverless cars will be make them safer than any human driver by removing the factor of human error. Yet as TV presenter, motorcycle racer, and lorry mechanic Guy Martin found in his Channel 4 programme, Guy Martin vs the Robot Car, the technology is still under development and it can fail. Furthermore, Amazon Prime’s co-presenter of The Grand Tour, Jeremy Clarkson has claimed that he believes driverless cars are dangerous. The Independent Newspaper reported in November 2017 that Clarkson had said: “I drove a car the other day which has a claim of autonomous capability and twice in the space of 50 miles on the M4 it made a mistake, a huge mistake, which could have resulted in death.”

So, with UK household names such as these finding that the technology hasn’t quite reached its maturity yet to justify the safety claims by its proponents, it’s no wonder why people are still wary of the concept of autonomous driving. There’s much work to do to prove to the public that it’s safe – particularly as the Southampton University and comparethemarket.com study also found that 55% of the respondents are concerned that the vehicles could be hacked and, thereby, controlled remotely. It also claims that another 53% of people think that driverless cars are more likely to crash than a human.

Insurers’ duty

Given these factors, the autonomous driving eco-system must demonstrate that these people’s concerns aren’t always justified. Within this eco-system lies the insurance industry, which some believe has a duty to move consumers over to autonomous driving technology.

Ben Howarth, senior policy adviser, motor and liability, at the Association of British Insurers, offers his opinion on how insurers can help: “Our main role is via the UK’s Automated and Electric Vehicles Bill, which is going through Parliament at the moment. A third reading of it is expected soon before it goes through the Lords. This creates a mechanism for claims settlement for automated vehicles. The Bill is intended for vehicles at SAE Level 4 fully automated vehicles, which are expected to be ready from 2021 onwards. We worked closely with the government on this and our recommendations for how the system should work are is being implemented.

Single policy

“The proposals suggest that automated driving will be covered by one single policy to cover all aspects of the journey (manual and automated), while also introducing a mechanism for insurers to claim against the original manufacturers, where they are ultimately responsible for the accident. If you are a disengaged driver in the driving in the seat of a fully automated vehicle, you will be treated as passenger and will be entitled to claim in the same way as someone in the other vehicle. You will be both be treated as a victim.”

Like many insurers he’s confident that autonomous technology will lead to a reduction in crashes and claims: “We know for a fact that AEB reduces accidents and the insurance industry was prepared to factor this into the pricing of premiums before we even had the evidence. This was our way of giving the technology a vote of confidence. We encourage consumers to use the technology but at the end of the day, it’s down to the manufacturers to create a great product.”

Address safety

Ngozi Emeagi, senior financial communications manager at Direct Line confirms that: “Concerns over safety is the biggest barrier to adoption of driverless cars based on a study by Direct Line Group released earlier this year.” He emphasises that consumers’ safety concerns must be addressed now to ensure that autonomous vehicles can be embraced in the future: “If driverless cars are to be a success, it's critical that the public have peace of mind and that their best interests are enshrined in law. This includes access to compensation if a vehicle driving autonomously has caused an accident and this is an area that Direct Line Group has been working closely with Government on.”

Autonomous limitations

David Williams, technical director at Axa Insurance, says that some of the responsibility for the safety of autonomous vehicles will depend on software updates and he accepts that there are currently some limitations to autonomous insurance: “There are a couple of limitations such as if you don’t update the software. If you have an iPhone and don’t update your software for 2 weeks, it doesn’t matter. If you have a tonne of metal, such as a vehicle, and you don’t update the software, then it becomes a real risk to life. So, the software will need to be regularly updated. Most manufacturers will make sure that the updates happen automatically, and that’s the sensible approach.”

Manufacturers’ role

Another view is that it will be down to autonomous vehicle manufacturers to persuade consumers that the technology is safe. Mohammad Khan, travel insurance leader at PwC comments: “I don’t think insurance companies have a say in moving people to autonomous driving but insurers have an interest in making people better drivers. If you look at the Drive app it’s trying to get a bit of competition going to encourage people to drive more safely. This is in the driver’s interest. If you are less likely to have an accident, you will gain from cheaper premiums.”

Going forth

Howarth forecasts that work on the technology and on providing the right insurance premiums for autonomous driving will continue well into 2018: “The next priority is to find out how we get data from vehicles to understand when autonomous mode is being used. This is something we’ll be prioritising in 2018, and how autonomous cars can be used safely.”

He concludes: “We expect a further consultation from the Department for Transport on the criteria that will be used to define what is and isn’t a fully automated vehicle, and the ABI will be closely engaging with it on these issues. The government wants these cars to start coming onto the road from 2012, so we still have plenty of time to resolve any existing issues.”

[Ins.Jarvis.2017.11.30]

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