Automated Vehicles and the Insurance Industry

The Casualty Actuarial Society’s Automated Vehicle Task Force released a 76-page report entitled “Automated Vehicles and the Insurance Industry, A Pathway to Safety: the Case for Collaboration.” The report discussed the impacts AVs will have on personal automobile premiums, compensating claimants, product liability impacts, non-premium considerations, automated vehicle risk and risk minimization strategies, and safety benchmarks.

The report notes that much is unknown about when the various levels of autonomous vehicles will begin operating on public roads, but does a good job at explaining the issues from an insurance and risk perspective. The report also points out where information is insufficient for evaluating and pricing risk (such as NHTSA’s police report countrywide data).

For attorneys and public policy officials, the report highlights certain areas that need close analysis: driver skill deterioration, pass-off risk (for sub-L5 vehicles that still require a human driver in case the vehicle encounters a situation it cannot handle), externalities such as animal hits, hacking, and technological errors, such as in the AV’s software. The report is worth a read for risk managers/in-house counsel, as well as product engineers.