Science fact or science fiction? Advances in vehicle technology and driverless cars

I have been spending a lot of time recently talking to people about advances in vehicle technology and the move towards driverless cars. This has been met with a mixture of great interest, some disbelief and from the self-confessed “petrol heads”, absolute horror!

There is no question that vehicle technology is advancing at a very rapid rate. Manufacturers see new technology as a tool to distinguish their vehicles from those of their competitors. The tide appears to be moving in one direction – cars are going to become more advanced, more independent of the driver and ultimately will be able to drive themselves. Government are also supportive as in their eyes, this will all lead to more efficient driving, less emissions and fewer accidents.

But this is just science fiction isn’t it? The answer to that has to be “no”. Look at many modern cars today – cruise control, assisted parking, anti-lane drift and autonomous emergency braking - all features fitted on many models as standard. Much of this technology is radar based – so tried and trusted and relatively cheap to install at the manufacturing stage.

Becoming more commonplace now is autonomous emergency braking or AEB. This is radar based technology which will brake the vehicle if it senses that an impact is about to occur. Manufacturers have generally got this working up to about 30mph and some systems are becoming so sophisticated that not only can they detect a vehicle in front but also a pedestrian crossing the road. Once AEB becomes universal, lower speed rear impacts should become a thing of the past. The issue is however, this technology is difficult and expensive to retro-fit and we have around 35 million cars on the road which don’t have the benefit of AEB.

The future is about the move to driverless cars. The Government consulted last summer and neatly distinguished the advancing technology into two main areas. Highly autonomous driverless cars (HADs) are those that can drive themselves but are fitted with a full set of controls and require a qualified driver. That driver must be ready and able to take control of the vehicle at a moment’s notice if required. Fully autonomous driverless cars (FADs) can drive themselves but would not be fitted with controls and would require no human intervention at any time.

HADs are to be piloted in the UK this year in Greenwich, Coventry, Bristol and Milton Keynes. These will be tightly controlled pilots which will build on the Google pilot in California. In this American initiative, Google ran HADs for over 700,000 miles without an accident. It is to be seen how HADs perform in the UK pilots but this certainly represents the next step forwards to autonomous vehicles on our roads.

FADs are a long way off becoming reality. A broad spectrum of commentators will tell you that in terms of seeing them on UK roads, we are anything between 15 and 25 years away from that happening. That said, in the same way that electric windows or air conditioning in a car was almost fanciful 25 years ago, the tide is moving in only one direction.

So what does this means for insurers? Certainly, the Department for Transport cite insurance as one of Government’s biggest concerns when talking about driverless cars. Our view is that until we do eventually reach a “FAD” world, the current motor insurance market and products remain valid. Whilst a driver has ultimate responsibility for the vehicle (as set out by the Government in their Green Paper), he or she cannot then rescind primary liability in the event of a collision. The “conventional” motor policy therefore must remain the solution but with insurers alert and aware of possible subrogation rights when the new technology fails and results in an accident which otherwise should have been avoided.

In a FAD world, current wisdom is that the UK road risk would transfer to a relatively small number of product liability policies held by the manufacturers. We are not so sure that this is a desirable, or indeed workable, outcome. Assuming FADs do not completely dislocate the whole model of car ownership, an owner will still retain an insurable interest in the vehicle. This means that they may want accidental damage cover or cover for theft, vandalism or the infamous bump from a shopping trolley. An owner may still retain a third party risk – an accident may be caused because of a poorly fitted roof box that flies off rather than technology failure and the owner would want an indemnity from any third party claim. Government will be anxious to find solutions that protect innocent victims and not leave cracks in a new system of motor insurance that genuinely injured people can fall into. They are also very cognisant of potential cyber-crime and the ability to independently interfere with a driverless car for criminal or terrorist means.

Insurers need to be aware of forthcoming change. From an underwriting perspective they should accept that not all manufacturers’ technology is equal (some AEB systems out-perform others) and that whilst their driver retains the primary liability, increasing technology could lead to more subrogation opportunities and challenges. Equally, the more technology that is loaded within a car, potentially the more difficult and expensive it becomes to repair and the more dependant the after sales supply chain becomes on the manufacturer.

We have come a long way from Henry Ford famously saying “any colour as long as it’s black”. Expect some very rapid developments in car technology and we should monitor the UK HAD pilots with great interest. Driverless cars are the future and whilst those of us who settle down every Sunday evening to watch ‘Top Gear’ may not like it, the genie is out of the bottle and the technology will only advance over coming years.