This article originally appeared in the spring 2016 issue of Wholesale Insurance News, a magazine of the American Association of Managing General Agents. It has been updated and reprinted with permission.
Since the early 1960s, the insurance industry has been a major force behind the most significant advances in highway and vehicle safety, including electronic stability control requirements, seat-belt use, and automobile crash worthiness. Now, accident avoidance and autonomous vehicle (AV) technologies offer an opportunity for us to advance another milestone in vehicle safety, going beyond keeping people safe in a crash to avoiding the crash altogether—saving lives, reducing injuries, and having a significant positive impact on the human and economic toll of accidents. Data from tests conducted by the Insurance Institute for Highway Safety (IIHS) shows that vehicle safety systems that are considered the building blocks of fully autonomous vehicles have been successful at reducing accidents.1
At the same time, AV technology could give rise to new and potentially costly liability exposures with characteristics that emerge along with the technology’s evolution from partially to fully autonomous. Will the tools and methods underwriters use to evaluate risk also evolve? What new products will be needed, both for traditional auto manufacturers and suppliers faced with new risks and for new entrants into the AV supply chain? When will these changes occur and how will auto insurers adapt?
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