Speaking at the ABI’s virtual motor conference, the MIB boss explained that insurers need to be ‘absolutely alive’ to the opportunities presented by data
Insurers need to be “absolutely alive” to the opportunities presented by a “data-driven world of mobility”, including autonomous vehicles and e-scooters, said Motor Insurers’ Bureau (MIB) chief executive Dominic Clayden.
Delivering the closing keynote on day one of the ABI’s annual motor conference – this year held online – Clayden explained that developments in the motor insurance market are all “underpinned by data” and that this can act as a “real power for good”.
Speaking specifically on autonomous vehicles and e-scooters, Clayden said: “All of these have technology and connectivity within them.
”They can be geofenced and they can send data back to their operators and these can be real powers for good. They can curb early excesses by users and insurers, I believe, need to be absolutely alive to the possibilities that this data-driven world of mobility gives us.”
Listing the opportunities around this data-centric approach, Clayden started with telematics. “At the moment, these are focused on young drivers, potentially problem drivers, but could insurers promote it more generally for rewarding responsible driving as the data and connectivity becomes more prevalent?” he added.
Furthermore, tracking technology could help to mitigate targeted thefts by cars “revealing their location or changing their behaviours” – in turn this could reduce premiums for drivers.
Clayden also believes that this connectivity will prove useful for enforcement purposes. For example, the MIB is currently running a pilot with the police where motor insurance data is linked to automatic number plate recognition (ANPR) technology.
Autonomous vehicles
Clayden additionally told the 180 attending delegates his thoughts on autonomous vehicles, and although he does not believe the switch to driverless cars will take place overnight, he did raise some concerns that have also been flagged in the government’s recently closed consultation on the automated lane keeping system (ALKS) technology.
For example, Clayden highlighted that insurers are to be held liable for claims costs if autonomous vehicles are involved in an accident – they will then have to attempt to recover the money from manufacturers “behind the scenes”, so to speak.
Also, drivers will - for the first time - be classified as a victim of an accident if in an autonomous vehicle, meaning that alongside any passengers, they will be entitled to a claim payout. In turn, this could bump up claim severity.
Clayden explained: “This represents additional exposure and a change in how insurance is going to work going forward, which will need to be included in everyone’s approach to pricing and risk assessment in terms of how vehicles are insured in the market going forward.”
Clayden added that level three automation, as classified by engineering association SAE International’s ‘Levels of Driving Automation’ standard, is “difficult” to get to grips with because drivers have to be aware of their surroundings and what the car is doing, but they are not physically driving.
Level three automation currently sits in a no-man’s land between assisted driving and full automation, where vehicles can drive themselves but may signal to hand back to the driver if it encounters a situation it cannot deal with, meaning drivers still have to remain alert while in the car.
“You’re keeping an eye on the road, you’re keeping an eye on everything that’s going on and the surroundings, but you’re not actually driving a vehicle. That’s something which is a real issue, which I think we’ve got to bear in mind when we are assessing risk and when the insurance industry is looking at that level three,” he said.
“I think it’s something that the government needs to give real thought to in terms of how regulation in that space is going to work”.
‘Kill switch’
With safety concerns around autonomous vehicles, Clayden added that he advocates the implementation of what he termed a “kill switch”, where a car won’t start or work until drivers have paid for or accepted required safety software upgrades from car manufacturers.
Clayden added that insurers shouldn’t have to pick up the tab for out of date software.
Furthermore, this approach could also be used for insurance, Clayden said, so that a car won’t start unless it has the relevant insurance.
An unwanted side effect of connected cars, however, could link to terrorism, where autonomous vehicles could be remotely hacked by terrorists to cause disruption. This is something the MIB is working hard to improve its understanding on.
Clayden finished by emphasising that it is not all “gloom” however.
He said: “One of the things that the insurance industry has shown itself in the UK to be is incredibly adaptable, incredibly able to meet future challenge. I believe with the right focus and the right changes going forward, the insurance [industry] has got a really vital role to play.
“It protects peace of mind, it protects injured people and it protects people’s property and that role continues to be there.”
The opening keynote of the ABI’s virtual event was delivered by Rachel Maclean MP, parliamentary under secretary of state at the Department for Transport.
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