In today’s society, the complexities involved with betting on risk are increasing. It has never been an easy proposition, but they are evolving at never before seen speeds due to rapid advancements in technology, expectations of customers and lifestyle changes. This poses a number of challenges for insurance brokers to tackle.
One particular issue – which would have seemed ridiculous and unrealistic 10 years ago – is that of fully driverless cars. Now in the foreseeable future, these cars will dramatically shakeup the insurance landscape; bringing along with them a number of questions regarding liability, control and what happens when cars drive or even fly themselves?
The spotlight was heavily fixated on this issue after the fatal crash in Arizona on the 18th of March 2018, which occurred when a driverless Uber collided with a pedestrian. This marked the first pedestrian death caused by a fully autonomous vehicle. Not only was the incident a step backwards for driverless technology with Uber grounding its autonomous fleet; but the incident brought to fruition all the concerns regarding liability when incidents like this occur in the future.
Rob Schimek of AIG conducted a survey into the public opinion surrounding the issue of autonomous cars. The results were interesting with a major finding being that 80% of respondents expected a rider in an autonomous vehicle to have insurance. Do you think the rider is at fault if a crash was to occur? Or is it the manufacturer of the vehicle, or the autonomous sensors? What if the autonomous vehicle is a bus, who is at fault then?
These questions spark a very interesting debate. Underpinning this debate is the fact that risk will never go away. It is shifting however, and the risk is shifting with technological advancements away from human error to machines.
The key point to take away for insurers, is if you don’t understand who is at risk, and what the public opinion is regarding who is responsible, then you won’t be able to help clients understand their risk profile. With a changing risk landscape, insurance companies need to evolve with it in order to keep fulfilling their major goal – reducing risk for their clients. Schimek explains once this is established the company should work out what intelligence can be gathered around pricing of risk for the client. This information should then be used to feed back into development of products and services that reduce risk for the client. This then in turn helps to inform risk selection of which clients to insure in the first place. This virtuous cycle will help solve the riddle, and the insurance industry can evolve with the technology around it in order to help more people when things go wrong.
