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Gearing up for insurance implications of self-driving cars

THE GLOBAL auto insurance industry is preparing to cope with new challenges that will emerge from the development of self-driving vehicles.

Kittinun Anupun of Claim Di app, an insuretech (insurance technology) start-up, said: “The emergence of autonomous cars like the Tesla brand in the US has raised questions on how the auto insurance industry will formulate motor policies and price the risks.”
“Developers of these self-driving cars have claimed there would be more road safety or fewer or even no accidents [due to the reliability of such a new technology and the absence of human error],” he added.
“In fact, there are now four levels of self-driving cars. Level One is the vehicles that have cruise control allowing drivers to fix the speed, which have been in use for some time. 
“Level Two is like the Tesla cars produced in the US, which have a so-called autopilot feature allowing the cars to be self-driven, but drivers can still override the self-driving feature when necessary. 
“We can programme Tesla cars to go to a certain destination and the vehicles will be self-driven towards that destination. They will go ahead and stop on their own when required.
“Still, it’s not yet at Level Three or Four, when these cars can interact with other autonomous vehicles. In such a scenario, hundreds of vehicles on the road will be able to communicate with each other. It’s likely that we’ll have to equip current vehicles with some computing system and software to allow them to interact with the new generations of vehicles,” Kittinun explained.
“Experts in the auto insurance industry are discussing when more than 50 per cent of all vehicles on public roads will be autonomous. It’s maybe some 20 years from now. At present, the latest models of Tesla cars could have the capability to communicate among themselves, but they would have challenges dealing with other vehicles.
“As a result, we will likely have to turn existing vehicles on the road into ‘connected’ cars, so that they can communicate with Tesla and the like to avoid accidents. In this scenario, existing cars will become IoT [Internet of Things] vehicles equipped with telemetrics and data stored in the cloud,” he predicted.
 “In addition, there will be a user-based insurance application which will work with the built-in telemetrics in models, starting this year. For example, the latest Isuzu models on sale in Thailand already have some telemetric features and sensors allowing the vehicles to stop automatically when approaching another vehicle.
“These vehicles are regarded as Level Two and Level Three. For the upcoming 2017 models, users will be able to communicate with their vehicles with their own mobile phones via a new app. For tech start-ups, we’re developing software and apps to tackle these challenges so that these vehicles become ‘connected’ vehicles.
“For insurance coverage, there remain several questions which need to be answered when a significant number of self-driving cars are on the roads. For example, what the responsibilities are of drivers or owners of these autonomous cars, and how the premiums will be calculated. Will premiums be based on a vehicle’s data from its telemetrics, or on the driver’s record – or both?” Kittinun said.

Published : October 21, 2016