With connected and autonomous cars on the way, insurance will play a massive part in the future of personal transport, which is why Swiss RE and HERE, the Location Cloud company I work for, have been working together to produce a white paper. The research has thrown up some particularly interesting results, and we’re likely to see some big changes both in the way we get around in the future, and the way we insure our own personal vehicles.
At HERE, we’ve spent plenty of time developing relationships around the topic of using data from connected vehicles and the infrastructure they run on, the services behind automated driving and automated roads, and also the different players in an ecosystem necessary for everything to run smoothly, including insurance companies and mobile network operators.
Because of that, HERE teamed up with Swiss RE, and we’ve looked how connected vehicles with various assistance systems are already reducing the risk of having accidents, how this will develop in the future and how the data we’ve gathered is relevant for insurance companies to usher in new types of policies in the future.
Helping us to avoid accidents
Our research has shown that one of the biggest issues on the road is drivers failing to look properly when moving, causing more accidents than anything else. This is where today’s sophisticated cars can make a big difference, with assistance systems telling drivers where parking spots are so they can keep their attention on the road for longer, along with making it easier to actually manoeuvre into spaces.
The technology in cars can also make a big difference when it comes to judgement calls – think about driving on the highway when you want to change lanes; maybe there’s somebody behind you and you’re not quite sure whether to pull out or not – assistance systems will be able to judge whether it’s safe, or even possible, far more effectively. All the sensors and computers in vehicles can react a lot quicker to upcoming situations. Take a complex situation in a bustling city with traffic coming from different directions, bicycles, pedestrians, other vehicles and obstacles – a computer can put all the information together in milliseconds where people may need a little more time. That extra second may be the difference between having an accident. And when we talk about efficiency, the more we can automate, the safer things can be.
From advanced driver assistance systems, towards systems with greater connectivity, towards fully autonomous cars, we’re already seeing the changes and benefits. Cruise control has morphed into adaptive cruise control, followed by cruise control with lane assist, and together with parking assistance we’re starting to see drivers hand over control to the vehicle in certain situations. It’s all about building trust, and once you’ve built that trust the next step is fully autonomous cars that don’t even have a steering wheel. If you just look at the claim Volvo made when it said that by 2020 nobody will die in one of their cars – it really is a statement.
Today we can already have fully autonomous vehicles that can drive on a racetrack quicker than a driver could do, but we need to capture the additional detailed information for mapping, and build connected systems so vehicles can talk to each other and to the infrastructure. We’re already seeing the technology in cars like the Mercedes S Class and BMW 7 Series, and it will trickle down into smaller, more affordable cars. In the meantime, that’s why we created a product called HD Live Maps, which is a virtual sensor so we can share information with mass-market cars that don’t have the same sophisticated technology. It’s only a matter of time though, and with the adoption of the technology we’ll continue to see sensors get smaller and cheaper.
With assistance systems already helping to reduce accidents, the insurance industry benefits as costs tumble, with lower premiums also passed on to the end customer. That’s just the beginning though, with technology and the data we can gather promising to change insurance policies forever.
A change to the way we gather information
Our research with Swiss RE showed that insurance companies need a better overview about what’s happening on the road, and we can deliver that in the context of location and what other vehicles are doing. We can use real-world data from smartphone apps and connected vehicles, for example, and the next step will be to see how the driver is behaving to assess the risk better.
In this instance context is key; take a 120kph stretch of highway and a driver that’s traveling at 120kph. Without any additional information this would be a good risk, but in a context where everybody else is traveling at 80kph, where it’s raining or a particularly low temperature, and actually having this insight makes it possible to assess the risk more accurately. It’s important that we do take steps to understand the risk better, as although premiums may tumble with more effective assistance systems, the cost of technology will see larger payouts in the event of an accident.
The data we’re gathering can also be used more actively, with the potential to inform customers of impending weather conditions, for example; maybe winter is coming early and it’s time to fit those winter tyres this month instead – it’s reducing the risk and taking a bit more care of your customers.
And if the worst does come to the worst, that data could be used to provide information to the emergency services as soon as possible. It could also help to get the ball rolling a lot sooner in smaller accidents as well, starting the claim process as soon as there’s an accident and not after the customer has waited for any reports or for paperwork to come through.
If the idea of gathering data from moving vehicles sounds a bit Orwellian, there’s no need to worry: there’s nothing sinister. Instead, drivers will be able to opt in or out of sharing data, with simple location analytics still helping to assess risks, and lower premiums on offer if the driver does agree to opt in.
Car ownership versus car sharing and other mobility services is likely to be the biggest change of all though, and from an insurance standpoint we’re going to have to look at building new products towards this kind of end customer. Somebody who isn’t interested in owning a car. In the future you may rent or lease cars, and somebody else will hold the insurance for that vehicle.
At the moment we face technical challenges around software development for autonomous cars, but in the future the challenges will be around who is taking over liabilities. If you have an accident today as a driver, you’re responsible, but there needs to be discussions between automakers and insurers, we need there to be systems in place to make sure everything is done to sort out liability. And at HERE that’s why we’ve been working with Swiss RE, discussing what happens with all this data and who is taking charge.