Conventional wisdom dictates that autonomous driving, underpinned by sensors and location software, will make driving safer and help reduce claims. However, several insurers including Aviva Canada have found that there could be a more than 10% increase in auto claims YoY post autonomy. This is being correlated with the rate of adoption of autonomous vehicle technology, that is, vehicles with driver-assist technologies will continue to be hit by vehicles without such technologies.
The level of driver assistance technologies available on some vehicles today
Greg Somerville, CEO Aviva Canada has said “Until we have a significant portion of the cars on the road with that capability [autonomy], the cost to repair those vehicles hasn’t caught up with the benefits that we are going to derive from them as an industry and as a society.”
When accidents occur, the repair cost is often higher for autonomous vehicles than for conventional vehicles. Nevertheless, the autonomous vehicle technology will continue to evolve and will continue to be accepted by the consumers.
Therefore, insurers need to find effective ways to reduce the claim costs. One way to do this is to collaboratively build ecosystems comprising of OEMs, body shops and technology providers and try and find synergies through such partnerships.
Another option is to leverage data from autonomous vehicle sensors which will help insurers and legislators understand the customer behaviour aiding in the development of innovative insurance products for an increasingly niche sector.
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