While the debate over autonomous driving and the role of telematics continues, one sector will prove crucial as insurers seek a business model for a driverless future – commercial trucking. In China, around 16 million drivers and 7.2 million trucks are responsible for the intercity transportation of goods and the opportunity for property insurers in commercial auto insurance will be bolstered by the following factors:
- The cost of autonomous driving technology, at least for now, is significant. While tech giants can afford to fund pilot programs, the investment required for scaled deployment makes more sense for commercial use cases presently.
- Unlike personal transportation methods, trucks and commercial fleets have repetitious destinations and predictable ranges, making it easier for autonomous driving programs to deliver.
- Although ride sharing platforms and public mobility options continue to reduce the number of vehicles on roads, commercial transportation is less susceptible to ride sharing and public transportation.
Given these macro trends, several Chinese insurers are using autonomous fleets to define their role in an autonomous world, and one company is at the center of current efforts; Tusimple. Tusimple is a Beijing-based autonomous commercial vehicle startup that develops computational vision for commercial fleets, advancements in 3D mapping and millimetre radar that will allow autonomous trucks to map their surroundings more accurately.
For example, the camera on Baidu’s autonomous vehicle currently has an accuracy of 90% in judging objects. For judgment of pedestrians, the accuracy increases to 95% and for traffic lights it reaches 99%. However, even a 1% inaccuracy rate can be disastrous when scaled across millions of cars, and Tusimple is bringing a level of precision to autonomous driving sensors.
For insurers, although sensor data will continue to improve, outlier use cases including operating autonomous vehicles in adverse weather conditions and rural areas, will still require human involvement and traditional coverage, albeit with reduced premiums.
Elsewhere, Ping An is co-operating with delivery fleet insurance startup CRO (cro.top). CRO is trying to optimise the performance of delivery fleets across China’s tier one cities by equipping 200m electric bikes with a telematics OBD that records location and driving behavior in addition to cross-selling commercial auto insurance to companies that rely heavily on offline delivery. Commercial insurance is also being prioritised by Allianz though a partnership with EasyMile, the manufacturer of self-driving shuttles that drive at low speed along pre-defined routes but also require insurance to cover unforeseen use cases.
It’s important to remember that autonomous driving will proceed along a continuum, as oppossed to an immediate transition. Although autonomomy promises lower emissions and safer transportation, there are scenarios and regions where autonomous vehicles cannot operate or only operate in a diminished manner. This, in addition to the continued importance of commercial fleets means the commercial vehicle segment represents a crucial test for insurers seeking to establish themselves in an autonomous future.