automated vehicles: potential insurance implications · automated vehicles: potential insurance...
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Automated Vehicles: Potential Insurance Implications Robert Tremblay Director, Research Insurance Bureau of Canada June 2, 2014
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Introduction
Automated vehicle technology is on the verge of maturity.
Technology moves fast; can insurance follow the changing needs?
What about the regulatory environment? Licensing, mandatory insurance?
There are potential insurance implications. But before we discuss, we
need to understand a few concepts…. Image Source: 18n9w1n479iimjpg.jpg, http://jalopnik.com/5533132/william-shatners-ten-favorite-cars, http://i.kinja-img.com/gawker-media/image/upload/18n9w1n479iimjpg.jpg, April 30, 2014
3 3 I N S U R A N C E B U R E A U O F C A N A D A / D A T E / P R E S E N T E R
Types of Insurance
Personal Automobile
Home/residential
Commercial Insurance (non-standard) Commercial vehicle fleets
Businesses, buildings, machinery, production interruptions, product liability etc.
Reinsurance
Global risk transfer for personal and commercial lines
Surety bonds
Linked to product liability, performance
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Players
Self-insurance Large businesses/organizations
Governments
Primary insurers (private or public)
National
Reinsurers National
Global
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First party Damages to your vehicle
Own injuries
Third party (except in no-fault systems) Damages to other vehicle(s)
Bodily injuries to others
Punitive damages
No-fault system Each party responsible for own damages
Cannot sue for punitive damages beyond compensation scale
Automobile Insurance
Image Source: Lower-My-Car-Insurance-300x199.jpg, http://tipstotreasure.com/lower-my-car-insurance/, April 30, 2014
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Business as Usual for Insurers?
Still speculating, no clear direction yet
Have to go by insurance principles
Industry responds to needs
Impacts potentially will be felt at different stages of
technology implementation Development
Introduction
Maturity
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Concept of Liability
A party can be held liable if that party’s conduct or product causes harm to another
party.
Parties in a liability-insurance-covered incident:
the insured (first party)
the insurance company (second party)
the injured or property owner.
Third-party liability insurance is a vehicle insurance that covers an insured whose
vehicle caused harm to someone else or caused damage to property and that insured
is held legally responsible.
Image source: liability-insurance-660x429.jpg, http://smallbiztrends.com/2013/05/lawyers-professional-liability-insurance.html, http://smallbiztrends.com/wp-content/uploads/2013/05/liability-insurance-660x429.jpg, April 30, 2014
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Liability Chain
Who is responsible if something goes wrong? Currently, the driver of a vehicle is responsible for being in control of the motor vehicle.
But … at level 4 and certainly at level 5 of autonomy, the driver is no longer a driver. He
or she has surrendered this function to the machine.
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Development Phase
Not just an enhancement of existing technology Requires extensive testing in a real driving environment.
Insurance is critical for “real life” testing.
Basic insurance coverage is required, but is there a need to go further?
Self-insurance is an option – usually large corporations will seek performance
bonds or excess coverage, beyond the self-insurance limits.
There will be a need for product liability for software developers, sensor suite
manufacturers, and interactions between sensors and vehicle.
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Automobile insurance will still be necessary due to coexistence of
driverless and human driven cars
Insurance industry will need to have good data for pricing. Need to use collision stats during testing/development phase
Introduction Phase
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Maturity Phase
With time, the cost structure of automobile insurance will be
affected.
We can expect physical damages to vehicles: theft, vandalism.
Bodily injuries, both minor and catastrophic impairment, will be
reduced.
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Individual transportation providers might go beyond
the auto manufacturers.
Business models will affect insurance requirements.
Business Models
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Changes in Types of Risks
Hacking/terrorism
Data breaches
Inappropriate response routine by program causing crash
Technologies coexisting
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This new technology will bring challenges.
Insurance industry is adaptive.
Cooperation and constant dialogue among all stakeholders will ensure
success.
You can expect insurers to support car or transportation pod owners and
businesses meet their insurance needs of the future.
Challenges Ahead
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Questions ?
Thank you!
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