Autonomous Cars Face Higher Adoption Barriers Than Drones, Ships

Driverless cars face higher barriers to adoption than autonomous ships and aviation drones, according to a survey released this week by the UK’s International Underwriting Association (IUA).

Of the three autonomous technologies discussed, self-driving vehicles face the steepest uphill climb across the board in overcoming infrastructure, public perception, cost, regulation and technological barriers to adoption.

In the case of driverless cars, collision was determined to be the most significant risk, however regulation at a global level for self-driving cars was deemed least important among the three technologies.

Despite barriers, the survey indicated all three types of vehicles are expected to be in widespread use within ten years.

The survey was completed by 27 individuals representing 16 IUA member companies, one legal firm and one insurance market association.

“Insurance companies are embracing new technologies and developing broad, wide-reaching cover for a range of different risks,” Daniel Fletcher, technology practice manager at Chubb Europe and Chairman of the association’s Developing Technology Monitoring Group (DTMG), wrote in a statement.

Fletcher noted the expansion of such insurance products generally mirrors the rate of development for the technologies themselves.

Of the six companies providing insurance for autonomous vehicles, the most common types of damage covered were third-party bodily injury and third-party property damage, making up more than three-quarters (78%) of total responses.

While research indicates autonomous vehicle technology will lead to fewer accidents, the growing possibility of more AVs on the road is raising complicated questions around insurance liability questions and how best to develop policy frameworks.

These were among the conclusions of a July white paper issued by the Travelers Institute, the public policy division of The Travelers Companies.

The paper argues any legal and regulatory structure concerning AVs must include insurance-specific components, including standardizing data governance and cybersecurity requirements.

A similar report released in March, from J.D. Power and law firm Miller Canfield, surveyed more than 1,500 drivers on the practical implications of litigating ADS product liability claims. It found more than half — 51% — of consumers would pursue litigation for a fully automated, Level 5 vehicle if it was involved in a collision and caused an injury.

When it comes to developing programs and creating value for customers, LexisNexis Risk Solutions’ senior director of auto underwriting, Tim Grant, said insurers should begin by reviewing their segmentation strategies and asking whether their business is heavily influenced by particular automakers, or if they want to test the market with all companies.

“The real change for automobile insurance in the future could be the cost,” Mike O’Malley, senior vice-president for public policy at the American Insurance Association, told TU-Automotive in April. “State regulations require insurance companies to use risk-based pricing.  So, if autonomous vehicles deliver on their enormous potential and actually reduce the number of accidents, insurance premiums will fall accordingly.”

— Nathan Eddy is a filmmaker and freelance journalist based in Berlin. Follow him on Twitter.

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