Autonomous vehicles: A brave new frontier?

Autonomous vehicles promise a world with fewer crashes and safer roads, if they are widely adopted they could have a major effect on the insurance industry.

However, experts offer differing opinions on the subject of them being practical and useful. Professor Graham Currie, Director of Monash Infrastructure and Professor in Transport Engineering at, Monash University believes, “We are at the top of the hype curve at present, and much of what is being said about driverless car performance is overly ambitious speculation.”

He doesn’t share the same views as Dr Stefan Hajkowicz, The Principal Scientist and Director of Insights at CSIRO’s Data61, who says that if things go well, vehicle automation will significantly reduce road accidents.

“I see a future where the insurance contract is negotiated and locked-in at the beginning of each trip (without the driver knowing). Algorithms working for the driver will automatically scan for and find the best performing insurance contract,” Dr Hajkowicz said.

Regardless of the adoption in the future it is essential that legally Australia is prepared for the eventuality that autonomous vehicles could be common in the very near future. Barry.Nilsson.Lawyers principal Henry Silvester says Australian legislation is way behind the technological advances of driverless cars.

He believes that this means there’s a risk of early adopters being on the roads without insurance coverage. Silvester said it was disappointing no legislation was yet in place and it was unlikely to happen quickly because the National Transport Commission (NTC) was still seeking submissions to an inquiry and would not present findings to transport ministers until 2020.

Australia needed a scheme that could accommodate autonomous vehicles (AVs) as they transitioned from level one – that is, vehicles with some automation, for example cruise control and hands-free reverse parking – to level five, ie no human control over the driving process.

Silvester said AVs would significantly reduce injury and death risks in vehicle accidents, because studies showed human error caused 90% of crashes. That meant compulsory third party (CTP) premium rates ought to decline or CTP could be replaced by an alternative scheme.

However, when accidents occurred, determining causation would be more complex. A defining factor was an AV’s level of control. If an AV’s software caused a crash, Silvester suggested that would be a product liability claim, not CTP. The data was likely owned by an offshore software producer, which added greater complexity. He said ethical considerations were important in determining liability in AV crashes, “Germany’s legislation requires vehicles to be programmed to consider human safety first and to harm the fewest number of people,” he said.

“But, if six drunks step in front of your car, will it be programmed to kill you to save them? Will a vehicle be programmed to consider the age of potential victims?”

This topic has been explored at length in the latest issue of Insurance Adviser, NIBA’s magazine for the intermediated insurance community. The NTC is inviting submissions from the insurance sector, you can read more here.