The auto industry is fueling up for new technology down the road. Fully autonomous vehicles and advanced crash-data analysis will all impact not only how the industry operates, but how it is insured as well.

Autonomous Vehicles

Technologists are steadily advancing toward the completion of a fully autonomous vehicle (AVs); however, timelines show that it will likely take more than a decade for AVs to deploy at a large scale for commercial applications, and even longer for widespread penetration in consumer markets. Whether ten or fifteen years away, or longer, when the AV fully arrives, it will deliver a new standard for vehicular safety and auto insurance.

Some of the hi-tech features that will enable AVs are already here. Many of these Advanced Driver Assistance Systems (ADAS), primarily focused on making the driving task easier and safer, are already demonstrating significant benefits in reducing the frequency of auto collisions. Today, auto collisions kill more than 38,000 people every year. While the projected impact varies significantly across multiple studies, if implemented as a primary mode of transportation in the United States, AVs are projected to decrease the number and severity of auto collisions by anywhere from 30% to 90%. Assuming these figures are accurate, this could translate into as many as 35,000 deaths prevented in addition to the likely reduction in injury severity as well.

While a future with autonomous vehicles appears safer, it will be years before they are broadly available. As we wait, we must work to protect present-day drivers…with a focus on accident data and auto telematics.

Using Data for Safer Roads

The first question most typically asked after an auto collision is, “Who was at fault?” Human error is part of human nature and is an expected fault. Many of the applications for telematics data today are focused on identifying (and improving) driver behavior...but human error does not account for all auto collisions. In fact, after analyzing data from police reports, traffic-analytics company TNEDICCA identified numerous hotspots, or locations where accidents disproportionately occur. This discovery suggests that location often plays a bigger role in the crash than originally thought.

Cities that studied crash location data were able to identify trends to inspect and address ‘hot spots.’ TNEDICCA predicts that through sophisticated location-based data analysis and risk mitigation implementation, crash rates could be decreased by up to 50%.

In addition, coupling information about where a vehicle is being driven with the more traditional telematics data elements focused on ‘how’ can yield even more powerful benefits for both commercial auto and personal auto insurance carriers. Not only can carriers gain a better understanding of the risks they insure, it provides them with the opportunity to share this insight with their customers. Leading carriers are already starting to take advantage of the chance to improve customer experience, moving beyond offering discounts and direct driver feedback programs to providing proactive risk mitigation features such as safe driving route suggestions with comparisons to other possible paths.

Emerging Auto Trends and Insurers

Technology is undoubtedly making roads safer and changing the way auto insurance is handled. AVs will simplify many aspects of human life; however, modern will require more than standard auto insurance. AVs have sparked discussion about collision liability, for instance. If humans are not at fault, who is? This creates the need for additional coverage options for “drivers” who weren’t literally behind the wheel. In addition, the increased data provided by telematics technology and location-based accident reports could change the way premiums are assessed, taking common drive paths and routes into consideration.

With all technology comes risk. The technological dependence of AVs creates a growing need for the inclusion of cyber coverage in auto insurance as well. Hackers could pose a greater threat to AVs, and pedestrians as well, should they break into the navigation systems. By the time AVs hit the market, we can hope preventative features will exist to fend off hackers. While the challenges posed by advancements in AVs are great, the rewards are greater. So, let’s hit the road.