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‘The big problem is unknown risk’: the insurance worry of self-driving cars

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The small yellow vehicle that ferries passengers around Harwell Science Park in Oxfordshire is strikingly different from other vehicles on British roads.

Since December 2021, site workers have been using the bubble-shaped electric bus to get around, taking part in an experiment with major implications for transport policy and insurers. The vehicle’s steering wheel has been removed as part of work to make it fully autonomous. It is the first vehicle of its type to be allowed on public roads in the UK.

The experiment is taking place as the first consumer vehicles with some self-driving capability are about to hit the UK market. Mercedes and BMW are preparing to launch UK models that will be able to stay in one lane and drive in slow-moving motorway traffic.

But the insurance industry, which must provide cover for this brand new mode of transport, remains deeply divided on how to manage this revolutionary development.

“The big problem is the unknown risk,” said Matthew Avery of Thatcham Research, which is funded by industry to investigate motor vehicle risk. “People might think self-driving cars will be safe and I really have to respond that maybe it’s not.”

There is also considerable uncertainty about how insurers will meet the challenges of investigating crashes involving self-driving or partially self-driving cars, particularly if there are questions about whether a human driver was in charge at the time. the time.

Avery said insurers were “uncomfortable” with the transition to autonomous driving and that among the “potentially significant” liabilities was a new class of claims – by drivers against their own insurers if the vehicle’s systems caused an accident.

Thomas Pitney, senior manager of auto underwriting at Aviva, which operates the Harwell shuttle, said the company hoped the data it was collecting from the project would shed light on the risks.

“There’s an appreciation that the best way to learn this is to challenge ourselves to better understand how it works.”

David Williams, an expert in the autonomous vehicle industry and former senior executive at Axa Insurance, insisted that the benefits of reducing human error would far outweigh the disadvantages.

“We believe technology will make roads safer,” Williams said of the insurance industry. “It’s important because that’s what easily means the biggest impact on insurance companies.”

The shuttle at Harwell, which has an operator and emergency safety controls, moves slowly and somewhat jerkily. Its guidance systems, developed by Darwin Innovation Group, a campus-based company, continuously relay data of its position to satellites. This is a potential model for providing essential information on collisions involving autonomous vehicles.

However, Martin Milliner, general manager of insurance claims at LV, pointed out that most manufacturers currently view data from self-driving vehicles as their own.

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This raised the possibility that insurers investigating the causes of a collision were missing out on vital information, Milliner said.

“Ultimately, while we can see the skid marks and weather patterns, unless we can figure out who was responsible, what was going on, and why the vehicle was or was not able to operate autonomously, it will be difficult to make those judgments.”

Martin Smith, head of underwriting at Aviva who has participated in formal policy discussions on autonomous vehicles, said different parts of the auto and insurance industries had held joint discussions to ensure the availability of a lite basic information set. But nothing currently obliges car manufacturers to share data.

“Our big policy request to regulators, government and agencies is to make sure we can easily access [vehicle data] so that we can verify and administer complaints efficiently.

Many insurers are hoping that legislation will force automakers to provide certain information.

In some cases, insurers could ask manufacturers for information that would reveal gaps in their autonomous driving systems. Avery pointed out that the UK’s Automated and Electric Vehicles Act – significant legislation, passed in 2018 – gave insurers the right to sue manufacturers for failures of automated vehicle guidance systems.

“The devil is in the details,” he said. “You . . . need to identify who was driving at the time of the collision and what was at fault, whose fault it was. Therefore, you are going to need data.

Williams acknowledged there would be “uncertainty” over the early self-driving claims. However, he expected most claims would continue to be handled as they are now, with the insurer of the driver whose vehicle caused an accident – whether by human or machine error – responding to all complaints.

The experience so far at Harwell has done nothing to dispel the idea that autonomous vehicles can be safe. Pitney said after more than 5,000 miles of driving, the company has yet to receive any claims on the shuttle’s insurance policy.

Williams said customers should also benefit financially if there were fewer accidents. “You have to believe that the premiums will go down.”

However, Milliner insisted that while the new technology was generally “positive”, there were also “elephant traps”. It was vital, he said, to anticipate inconvenience and ensure that other more vulnerable road users such as pedestrians and cyclists were also protected.

“You don’t want to invite these things into your world mindlessly.”

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