#Driverless #Economy - Insurance challenges


For the past hundred years, innovation within the automotive sector has brought major technological advances, leading to safer, cleaner, and more affordable vehicles. Since Henry Ford introduced the moving assembly line, the changes have been evolutionary and have provided us with one of the most complex products in the world affording us very high mobility.

But we forget that the success of the automobile was not completely envisioned. Henry Ford once said ‘if I’d asked my customers what they wanted they’d have said ‘a faster horse’ – in other words we don’t know what we want until we have it. This is nowhere more true that with today’s mobile telephones – and of course anyone under 25 does not say ‘mobile’ – it’s just a phone. This is an important factor because one of the unforeseeable aspects of the driverless car revolution is the potential for the market to demand this technology faster than we in industry, the Government and regulators can keep up with. Smart mobile phone growth has been staggering - in 2014, sales of smartphones worldwide topped 1.2 billion, which is up 28% from 2013! What could the future hold for driverless cars if we get a taste for the benefits they bring?

Now, in the early decades of the 21st century, we are on the cusp of revolutionary change—with potential to dramatically reshape not just vehicle manufacturing but also the way we interact with vehicles and, indeed, the future design of our roads and cities. And the timing may be sooner than you think, it is possible that children born in the 2020’s will always expect a car to drive itself – this could be normal.

The tangible benefits are huge. New collision avoidance and intelligent vehicle technologies could deliver significant and cost effective benefits to UK citizens and the UK economy. Thatcham Research estimates that Autonomous Emergency Braking (AEB) will reduce fatalities by 1,220 and all casualty types by 135,000 over the next 10 years. Low speed AEB is already showing benefits in reducing front to rear crashes, and claims data in the UK is showing a 20-30% reduction in resultant personal injury claims; this is now reflected in premium reductions. The latest data is showing over 40% reductions in personal injury claims on the latest Golf variants fitted with the AEB technology.

As most accidents are a result of human error it is likely that these new driverless technologies will have a significant positive effect for Britain. There will be knock on effects in healthcare, congestion, overall economic growth; they will also contribute to further downward management of CO₂. Thus there is an urgent need to evaluate and quantify these benefits and to create a strategy to manage and/or encourage their implementation, Thatcham Research is putting significant resources toward this in future research programmes.

There are also new players entering the vehicle engineering arena – shaking up the existing car makers. The Google Self-Driving Car is a project by Google that involves developing technology for autonomous cars, mainly electric cars. The software powering Google's cars is called Google Chauffeur. Lettering on the side of each car identifies it as a "self-driving car". The project is currently being led by Google engineer Sebastian Thrun, former director of the Stanford Artificial Intelligence Laboratory and co-inventor of Google Street View. Thrun's team at Stanford created the robotic vehicle Stanley which won the 2005 DARPA Grand Challenge and its US$2 million prize from the United States Department of Defense. In May 2014, Google presented a new concept for their driverless car that had neither a steering wheel nor pedals, and unveiled a fully functioning prototype in December of that year that they are planned to test on San Francisco Bay Area roads in 2015. Google plans to make these cars available to the public in 2020.

This Silicon Valley giant has been more recently followed by Apple who are reported to be recruiting hundreds of staff to develop an electric car. Former employees of American car maker Tesla are among those who have recently joined the tech giant. Apple famously has an unrivalled ability to provide consumers with exactly what they want, without them previously knowing that they wanted or needed it. The traditional car industry needs to take this news seriously, as Apple is currently in 2015 sitting on a cash pile of $150 billion, which is an amount greater than the combined market capitalisation of Ford and General Motors!

Lastly Tesla. This new electric car start-up has taken the automotive industry on at its zenith – building highly desirable executive cars – with a proper range of over 200 miles. Not only has the company created great cars with a really powerful brand with an eco-message, it has single-handedly made history through its use of over-the-air software updates to add functionality to its vehicles for its customers. In mid-October this included the world’s first motorway Autopilot technology – how’s that for customer satisfaction!

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Andrew Miller, Chief Technical Officer, Thatcham

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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