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Autonomy to have profound effect on insurance industry
Volvo and Thatcham Research are discussing the effects of autonomous driving technology on the motor vehicle insurance industry in the next two decades.
A high level discussion is taking place today in the UK headed by Volvo Cars and Thatcham Research to cover the effects on the insurance industry of the increasing levels of vehicle automation and the prospect of fully autonomous vehicles beyond the end of the decade.
According to a report called “The future of motor insurance – How in-car connectivity and ADAS are impacting the market” written by Swiss Re and HERE, crashes will reduce by 80% by 2035 and there will be a correspondinly massive decrease in insurance premiums, wiping up to 20 billion US dollars from the motor insurance market, a market that represents over 40% of global insurance revenues.
The seminar being held today, “A Future with Autonomous Driving Cars – Implications for the Insurance Industry” will be attended by Volvo’s President and Chief Executive, Hakan Samuelsson. He believes that although the impact on the insurance industry is likely to be significant, it should be remembered that the reason for this is fewer accidents resulting in reduced injuries and fewer fatalities. “Autonomous drive technology is the single most important advance in automotive safety to be seen in recent years,” he said.
These views are shared by the Chief Executive of Thatcham Research, Peter Shaw, who predicts that after the start of the next decade, vehicle autonomy will enable drivers to “drop out of the loop” for parts of their journeys, resulting in a dramatic reduction in crash frequency.
“We’ve already seen this with the adoption of Autonomous Emergency Braking (AEB) on many new cars,” he said. Quoting research conducted by the US National Highway Traffic Safety Administration (NHTSA), he continued by explaining that crashes are expected to reduce by 80% within the next twenty years due to autonomous and connected vehicles. “Additionally, if a crash can’t be avoided, then the impact speed will also drop as a result of the system’s performance, reducing the severity of the crash,” he told us.
Volvo recently announced its commitment to maximising the safety benefits of autonomous vehicles with the beginning of the Drive Me UK project set to start next year involving up to 100 cars being driven in similar situations than those underway in Sweden and China.
Commenting on the need for a cross-industry cooperative approach to autonous vehicle development, Håkan Samuelsson continued, “The automotive industry cannot do this on its own, we need the government’s help. It is essential that carmakers work with the government to put in place laws and regulations that allow us to get these cars on the road as soon as possible and start saving lives.”
The opinin of the UK’s Secretary of State for Business, Innovation and Skills, Sajid Javid, is that driverless cars will see journeys become faster, cleaner and safer. “The UK is leading the way in developing the technology needed to make this a reality thanks to our world-class research base and these types of trials will become increasingly common,” he said.
Referring to autonomous motoring as a revolution in automotive safety, Mr Samuelsson said, “Volvo has a vision that no one will be killed or seriously injured in a new Volvo by 2020. Autonomous drive technology is a key tool in helping us achieve this aim.”