Page 31 - EQ Mag-issue 5
P. 31
INSURANCE RESOURCE
How Do Self-Driving Safety Features Affect
Your Car Insurance
By Jason Notte
Many drivers are ready for autonomous vehicles, even if by 2050. That's a nearly 20% loss over the next 30 years,
the insurance industry isn't. And while the safety with any offsetting gains coming only in theory.
features of self-driving cars can reduce the risk of
accidents, that may not translate to cheaper car "Insurers are bracing for long-term declines in auto
insurance premiums for drivers. premiums as new and safer autonomous vehicles gain
adoption," said John Cusano, a senior managing
The National Highway Traffic Safety Administration says director at Accenture and global head of the company's
that more than 3,450 people insurance practice, in the
were killed by distracted drivers study's release. "However, our
in 2016, the last time it research suggests that auto
compiled such data. It notes premiums will increase before
that sending a text takes the they decline on this trend, so
driver's eyes off the road for insurers that can navigate the
five seconds, which is enough c h a n g i n g t e c h n o l o g y
time to cover the length of a environment could win market
football field if you're going 55 share."
miles per hour. As a result,
drivers are more inclined to Janet Ruiz, director of strategic
share the road with automated communications for the
cars than with texting drivers. I n s u r a n c e I n f o r m a t i o n
Institute, notes that it will still
A survey by InsuranceQuotes be some time before many
found that 73% of consumers think a texting driver is drivers see significant benefits of electronic safety
more dangerous than a self-driving vehicle. Though features. As Ruiz notes, the first semi-autonomous
there are concerns about technical failures (51 %), features didn't find their way into cars until about 2012.
hacking (22%), lost driving jobs (13%), and the cost of Meanwhile, the average age of a car on U.S. roads
self-driving vehicles (9%), the insurance industry is jumped to 11.7 years old in 2017, according to IHS
already seeing the benefits of certain driver-assisting Markit. If that trend holds, Ruiz says the benefits of even
technology. the earliest, most basic autonomous features may not
"Safety features, like automatic emergency braking, trickle down to younger used car buyers until around
appear to lead to a reduction of accidents on the road," 2023.
says Pete Gulbrandsen, vice president of auto product,
personal insurance at Travelers. "The features provide "Safety is always a great benefit, so reducing risk as
additional safety in situations when a driver's alertness early as you can is a good thing," Ruiz says." With this
has decreased.” kind of technology, it's good to be a first adopter."
Meanwhile, it may take some time before insurers
While entrepreneurs like Dan Peate, whose adjust to a new, less-risky normal. In 2015, a study by the
autonomous-vehicle insurance startup Avinue has been Insurance Institute of Highway Safety (I IHS) covering
featured by Bloomberg and Crain's, figure out a way to the very first automated safety features available in
capitalize on that decreased risk, drivers are about to 2011 and 2012, found that safety technology —
get a big break from their misfortune. According to a especially electronic stability control – decreased the
study by insurance firm Accenture and the Stevens likelihood of a driver dying in a crash of a late model
Institute of Technology in Hoboken, N.J., the more than vehicle by more than a third over three years. Nine car
$225 billion insurance industry will see traditional models had zero fatalities per million registered
premiums drop by $25 billion by 2035 and by $41 billion vehicles.
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