- Insurance adapts to the driving of the future - 12/05/2022
The evolution of the automobile throughout history has been closely linked to two fundamental factors: first, motorization, and secondly, and perhaps the most relevant, the incorporation of elements to improve safety.
The safety of the driver and the car’s occupants has been an important element in the development of hundreds of models of vehicles for private use, from incorporating the first windshields back in the 20s of the last century to integrating driving assistance systems today. These systems aim to drastically reduce the accident rate. In addition, the European Union is currently mandating automobile manufacturers to install them in all new vehicles.
With this measure, the European body aims to avoid 25,000 deaths and around 140,000 serious injuries by 2038.
What Are ADAS Systems?
ADAS systems sistemas ADAS, are Advanced Driving Assistance Systems. However, as their name suggests, they are systems that assist the driver but are not, in any case, an autopilot. The most common are Lane Departure Assist, Cross-Traffic Detection, Adaptive Cruise Control, Pedestrian Detection and Autonomous Emergency Braking.
All of them are designed to improve driving safety and reduce accident rates. However, they open up new unknowns and scenarios in other fields such as insurance.
In this sense, at Reale, we understand that an insurance group plays a key role in the production system of automobiles because it contributes to their “safety” and, therefore, indirectly enables their long-term stable development.
Technology has made significant advances in recent decades. ABS systems were first introduced in the 1970s. But that was only the beginning; today, we are talking about cars that could be driving themselves in the very near future.
Autonomous driving is the crux of the matter here, but it poses challenges on several levels with the main ones being its usage and the implementation conflicts with some aspects of legislation.
Autonomous driving in Europe has immediately aroused great interest, although the hype has not been the same as in the United States, whose players have been more reactive.
That said, the various European countries have moved independently without a common roadmap. The North has thus been able to play a pioneering role, carrying out the first experiments. It was closely followed by countries such as Germany and France, both of which are very attentive to the development of this new type of mobility.
Unfortunately, Italy is a bit behind in this phase, but some interesting opportunities are gradually emerging thanks to the existing regulatory framework such as the Smart Road Decree and the so-called “Right to innovate”.
This has led to the emergence of new experiences on public roads of self-driving indigenous minibusses dedicated to passenger transport. Examples are the“Show” Project in Turín or the “Ride2Autonomy” in Reggio Emilia, where the Reale Mutua group will most likely participate as an insurer.
Vehicles Technologically Prepared But Not The Legislation
Although the technology allows virtually complete autonomous driving, its implementation is still gradual. This is expected because legally complex situations arise when an accident is triggered.Therefore, at Reale, we think it is essential that the regulatory framework be well defined.
There is still a long way to go before we can see a significant number of Level 3 and, consequently, 4 and 5 autonomous driving vehicles around Italy and other European countries.
Thus, although the technology has continued to advance, autonomous driving still presents different levels of independence from the driver. For example, it should be noted that level 3 and level 5 are slightly different in terms of human activity and proactivity.
At level 3, the driver must be able to intervene and take control of the vehicle in case of obvious danger. At level 5, on the other hand, human intervention is never required and passengers can “forget” about managing it.
In this context, it goes without saying that the areas of responsibility will have to be reviewed, i.e., who takes responsibility for whatever happens, who says “it was my fault”. It is logical that an autonomous vehicle, by its nature, exempts the driver from responsibilities as the technology decides what happens at any given moment. This technology, in turn, is making decisions based on numerical parameters and algorithms that are theoretically neutral and unambiguous thereby eliminating “the human factor”.
But as we know, some things are already changing. In Italy, for example, we observe a strong interest on the part of the legislators who are preparing to face new challenges in the field of autonomous driving by granting authorizations for ad hoc experiments throughout the country.
On the other hand, we must not forget the part linked to the homologation of certain types of autonomous driving vehicles that have to face a rather complex bureaucratic process to receive the necessary authorizations to circulate.
Artificial Intelligence Not Only In Vehicles But Also On The Roads
Autonomous driving thas been relegated exclusively to the role of vehicles, but now, we must take the roads on which they must travel into account.
The regulatory limits of vehicles have already been mentioned in part, but if the vehicles are technologically “ready”, the infrastructures are not ready because they are still far from meeting the necessary minimum standards.
Making autonomous driving viable means creating suitable environments for it. If we dedicate ad hoc lanes in a context where old vehicles and modern vehicles participate in traffic, we must ensure that they coexist safely, with the least possible impact on traffic.
Especially since today’s vehicle fleet is very old, an average of almost 12 years in many cases.
In this sense, intelligent vehicles must be able to “dialogue” with fixed and mobile infrastructures to collect useful information for driving through the use of advanced intelligent signals, which must be adequately prepared by local authorities.
Autonomous But Also Connected Vehicles
We have been talking about vehicles that are capable of driving themselves. We must also discuss their connectivity. Here the vehicle’s ability to provide information on many aspects broadens the insurance coverage and liabilities spectrum.
This is because most advanced vehicles are full of sensors of all kinds and are capable of collecting a quantity of information unimaginable a few years ago.
And the fact is that if we analyze the new categories of potential risk, some are directly linked to the technological field especially the potential cyber-terrorist risks. Thus, navigation and vehicle management software could, like other technological devices, be at risk of being hacked by malicious third parties.
Therefore, the producers of these programs will have to guarantee that the systems are highly secured and at the same time, insurance companies will have to be ready to play their part.
Reale is working along these lines and has long specialized in the production of insurance coverages linked to Cyber Risk.
With these aspects in mind, it will also be easy to identify who might be held responsible for the cause of the accident within the “production chain”.
If it is the navigation software that is the cause of the accident, it will be important to clearly understand whether this software was supplied by an independent industry and perhaps even guaranteed the end users, or whether it is integrated and sold as an element that is part of the vehicle, as sold by the car manufacturer itself. This is what happens with the current control units present in cars.
A third hypothesis is that the manufacturers will develop the navigation software internally without resorting to third parties.
All these potentially create the basis for possible insurance “claims”. After all, self-driving vehicles are increasingly taking on the role of “software with four wheels”.
We are convinced that knowing all this data will enable us to create more advanced products that will meet the future market needs which will be based on autonomous driving.
Responsibility In Autonomous Driving
The driving responsibility of the future also envisages the creation of possible special compensation funds. In this context, companies and legitimate entities will have to be able to make their contribution in a more advanced framework than the existing one.
It will be necessary to collaborate with other players in the sector and with the options suggested by the legislators. In such a complex framework, insurance companies will be able to cover the risks identified properly, contributing to the momentum of the growing adoption of new technologies within the mobility ecosystem.
Reale Lab 1828
At Reale, our innovation center Reale Lab 1828 is constantly looking for new challenges. We are determined to contribute and support the group in its transformation, creating synergies and projects considered of strategic value to the business.
We therefore try to be as up-to-date as possible, participating as insurers and active partners in a number of projects in the field of autonomous driving in Italy.
We try to learn as much as we can and to be sufficiently reactive and prepared for any future eventuality, knowing that not all countries in the world are preparing for the adoption of self-driving vehicles in the same way.
However, a systemic interest will contribute to the creation of shared intentions between players in different industries and all the necessary stakeholders in the field of autonomous driving. We believe this can represent a concrete push towards the rapid growth of the current ecosystem.