The UK has been at the forefront of automated vehicle technology, but now policymakers are turning their attention to how the law will have to keep up. It is an issue that the insurance sector is dealing with now, as the introduction of driverless cars will very likely change the face of the industry.
According to motor safety surveys, at least 90 per cent of all car accidents are due to driver error. With computers in charge of cars, it is anticipated that there will be fewer accidents, as machines will not take the risks that humans do when at the wheel.
Changing face of the insurance industry
Fewer accidents mean fewer claims and ultimately cheaper car insurance for the consumer – a prediction which, if correct, will mean a major restructure of the industry. University of Southampton alumnus, former Chief Financial Officer at Admiral Group Plc and recent CEO of Elephant Auto-insurance, Kevin Chidwick (BSc Politics and Law, 1984) says the issue of automated cars is near the top of the priority list for insurance firms to tackle.
Kevin, who is based in Virginia, USA, explained how the new technology could see more drivers on the road as those previously unable to drive would be able to take advantage of the new technology.
Despite this, Kevin says the frequency of accidents is predicted to go down.
We expect to see a shift between the severity and frequency of accidents, with fewer accidents taking place, but when they do, they would be more severe.
He added that fewer claims would mean a ‘shrinking’ of the auto-insurance industry with some predicting a reduction to around a quarter of its current size. This has already lead major insurance firms to diversify their business by offering more services in other sectors.
“It surprises many people when they hear that once management expenses have been covered for a claim, there really isn’t much profit left for the insurance company, so I would expect to see firms looking at their business models, particularly with a view to shrinking their costs. It will become a case of survival of the fittest I think,” he added.
However, in the short term Kevin predicts a ‘grey area’ that insurers will have to work through as automated vehicles come into the market, particularly surrounding semi-autonomous vehicles whereby drivers are ‘hands-free’, but in a position to take over at any time should an incident be imminent.
Research leading safety design
It is this area that has formed the basis of industry-leading research by a team at the University.
The study showed the length of time needed for a driver to switch from automated vehicle control to manual vehicle control is crucial for the safety of future automated vehicles.
The researchers believe their findings will be important for system designers when considering the lead time needed to take control of a vehicle and suggests the focus shouldn’t just be on the average time needed for a person to successfully switch, but rather on the range of resumption times.
Shaping new legislation
Last month saw the first reading of the Vehicle Technology and Aviation Bill that sets out, among other things, how the insurance industry in the UK will have to adapt to the introduction of autonomous vehicles.
The government has followed through on its pledge to adopt a single insurer model, meaning that the insurance company would deal with the liability issues arising from claims involving driverless cars.
The insurer would then be free to claim against the manufacturer if a fault was found with the car while it was in driverless mode.
Researchers from Southampton were consulted as part of the formation of the Bill, which aims to make it easier for automated vehicle accident victims to be paid compensation.
Matthew Channon, Teaching Fellow in Law and co-author of The Law of Driverless Cars, was part of the Southampton group that answered the consultation on the Bill, which mentioned in the government’s response. He said: “The whole point of having insurance is that if you are involved in an accident that wasn’t your fault, you can seek compensation.
“If you start having more than one liability insurer, it could lead to a battle in court which could massively delay compensation to the victim.
“Insurers have lobbied for this type of policy where one of them pays and then recoups the money, perhaps from the other driver’s insurer or back from the manufacturer.” However, Matthew said it was important for the new legislation to take into account all issues surrounding automated vehicle insurance, not least how it would work cross-border, particularly relevant with the ongoing Brexit deal negotiations.
He also welcomed that the Bill makes provision for details including what would happen in the event of modifications on the vehicle that had not been approved, or in the event that a software update had not been installed.
Despite the many obstacles yet to be negotiated surrounding driverless cars, both the industry and academics appear to be welcoming the prospect of a new type of vehicle on our roads.
Are they worth it to society? A million times over. There are so many advantages to driverless cars; saving money and saving lives, saving the stretched NHS resources and saving emergency services.
“Of course there are going to be casualties, but the lives the technology saves are more than the lives lost. This new Bill is a welcome step at this moment, but we can’t rest on our laurels. They have to keep up-to-date with technology and alter the legislation quickly if it needs to be done.”
Have your say
The poll in this article is optional and anonymous. The polls are covered by Ethics 17326.