Advanced driver-assistance systems, automated driving functions and alternative drive and mobility concepts are revolutionising the nature of motorised transport. This entails consequences in terms of claims and liability issues. Insurers are closely monitoring the sea change in the motor industry, which has long since moved beyond pure vehicle insurance. This is our industry’s take on five key issues:
A sensible approach to promoting sustainable investment
The threat of global warming poses major challenges to society that extend beyond future mobility. That’s why German insurers support the EU Commission’s sustainable finance initiative. Institutional investors such as insurers can make a major contribution to climate protection by financing sustainable infrastructure projects. Public funds alone are insufficient to meet climate targets. The EU Commission estimates that investment worth EUR 180-290 billion per year is needed to meet climate objectives in Europe alone. However, the conditions must be right, both in terms of the risk-return profile and the investment offering. One solution would be to set up a pool clustering the projects on offer and making them accessible to a broad investor base. As a rule, market-based solutions should be prioritised, because it's not enough to just be green. Economic and ecological considerations are not mutually exclusive, but of course our first concern is the security of our customers’ contributions.
Automobile security is not divisible
If autonomous driving is to catch on, the systems will have to be more secure than human drivers. As long as accidents occur, there must be a clear system to define how and by whom victims are compensated. The issue of responsibility is currently straightforward as the drivers are at fault in most cases. As autonomous driving becomes more established, the relevance of the driver (including their responsibility) will fade as driving becomes more of a collaborative process. Drivers, owners and manufacturers will be joined by IT service providers, mobile operators, digital network operators and digital card providers. Responsibility and liability will be shared among these parties. However, this will not complicate matters for accident victims. In fact, we already have clear rules that also apply to autonomous driving: if operating a car results in bodily harm or property damage, the owner’s vehicle liability insurance covers the claim. That doesn't give the parties responsible for autonomous driving carte blanche to do what they like, of course. Anyone who brings faulty systems to market will be held responsible within the applicable legal regime. However, establishing where responsibility lies in autonomous driving to the extent of providing evidence that will hold up in court is a very laborious task, which is why it should fall to the motor insurers as opposed to the claimants themselves.
My car, my data
Autonomous and connected driving produces vast quantities of data. Insurers are already using this data to apply telematics-based rates as a way of rewarding the most careful drivers. Car drivers can also benefit from new services brought about by digitalisation, for example the accident reporting service provided by insurers. However, that is contingent on the drivers owning the data as opposed to the manufacturers. Drivers must be free to decide with whom they share their vehicle data – car manufacturers, insurers, vehicle dealerships, mobility service providers or auto clubs. If manufacturers had exclusive access to this data, it would give them an unfair competitive advantage, and in some areas they could establish permanent monopolies. That would be to the detriment of motorists, who have to buy car insurance and expect the best possible risk calculation and service from their insurers.
Loss prevention through new technology is not that effective
Advanced driver-assistance systems and automated driving functions reduce accidents and make the roads safer. At least that is the common assumption. However, research conducted by GDV experts shows that the new systems will reduce motor insurers’ compensation payments by a mere 7%-15% by 2035 compared to 2015. In the reference year 2015, insurers settled losses in the region of EUR 22 billion. There are a number of reasons why the effect is so small: a highway pilot is as helpful against car thieves as a parking assistant against rockfall, hail or marten bites. The systems are only slowly catching on and the addition of sensors and new technology to cars increases repair costs in the event of a claim. An assistance system adds about 30 percent to the cost of replacing a windscreen.
A world without traffic fatalities is achievable
Autonomous driving will only become the new normal if the technology is secure from the outset. No traffic-related innovation is acceptable if it provides less security than a human driver. People behind the wheel only cause an accident resulting in bodily harm once every 2.5 million kilometres on average. So, that is the benchmark against which every new technology must be measured. In the early 1970s road traffic was high risk: seatbelts weren't mandatory and there was no speed limit outside built-up areas. The result: there were over 20,000 fatalities every year in spite of there being only about 15 million cars on the roads. Since then, different players have done their share to improve road safety. Lawmakers made seatbelts mandatory and introduced speed and blood-alcohol limits; car manufacturers provided air bags, crumple zones and electronic safety systems such as ABS and ESP. Insurers have also played their part, having worked on improving road design since 1951. The insurance industry also founded a centre to research vehicle security in 1968. Today, the centre’s accident research still shows how traffic security can be further improved. Since 2013, the number of traffic fatalities has not fallen significantly any more, fluctuating instead between 3,200 and 3,500 per year. However, as long as the number of road deaths is more than zero, every standstill is a step backwards. Not even a low number of traffic deaths is an acceptable price to pay for individual mobility. All the more reason to make improved security the number one priority – for every traffic law, every new road and every new innovation initiated by car manufacturers and suppliers.
Jörg von Fürstenwerth