What are your views on Mercedes accepting responsibility for accidents caused by its automated lane keeping system?
DJ: “This is a really interesting announcement and is in line with the recommendations from the Law Commission. On paper, the liability is clear, but I think there is some work still do – together – before we can work out how it would play out in practice.
“There’s also a massive difference between retail insurance and fleet insurance. For an individual policyholder, one of these ALKS-equipped cars would probably be on a comprehensive policy with a small excess, whereas in the fleet market a lot of people almost self-insure, with huge excesses on third party only cover. I’m guessing Mercedes focused on the retail business, but it will be interesting to see the implications for fleets.
“Let’s think about what happens in a claim: You’re lucky enough to be given one of these cars as a fleet vehicle and unfortunately you get sideswiped. There might well be a sticker on the windscreen with the number of an accident management company or a fleet manager.
What happens next is important. The person who takes the first notification call will run through a script and ask certain questions. They’ll ask what happened and you might say “They clipped me and took off the wing mirror”, you’re unlikely to say, “It was an issue with their lane assist system”.
“If it’s a sub-£5,000 claim, an accident management company might well just authorise the repair and arrange it via one of their approved repair centres. Job done. This Mercedes announcement means interfering with that very efficient process. Even if an insurer starts looking at the cause of the accident, the report might say “The vehicle just came to a stop – it was a malfunction”. The driver was still supposed to remain in control so how do you attribute blame to the lane assist?
“As an insurer providing basic Road Traffic Act (RTA) cover, we would have to pay any losses and then go to Mercedes and say we’d like our money back. We will need to develop the process of sign-off and how the costs are charged back – of course, these things will come as we get deeper into the deployment of AVs.”
What are the implications of attaching liability to the vehicle rather than the driver?
DJ: “I wish I had a pound for every time this came up in conversation! Let’s say the law changes and self-driving is allowed. What cover would be needed? Does it look like a motor policy? At AXA we’ve got working groups looking at that. It’s all in the wording but very few people read the 50-page agreements – they just want to be covered so we want to make the end product as comprehensive as possible.
“The definition of insurance is transferring risk. Somebody pays for loss or damage caused by something going wrong. That’s the bottom line. We currently insure several organisations trialling autonomous vehicles in the UK, so we understand the exposure. They’re close to the point where they want to take the safety drivers out, and we’re very involved in that discussion.
“The rate of progress is increasing. I bought a Q4 recently and Audi’s technical centre couldn’t answer one of my queries because “it is too new”. We’ve recently clarified our cover for electric vehicles (EVs), looking at things like cables trailing and chargers blowing up. These are new eventualities, but it’s just a case of changing the wording to respond to these new customer needs.
“When it comes to full autonomy, I know it sounds complicated but, in all honesty, I don’t think it will be. Rest assured, by working with The Association of British Insurers (ABI) and Thatcham, the insurance industry will take new factors into account and provide the right cover.”
Is it sensible for ALKS to be the first system defined in UK law as “automated”?
DJ: “As Thatcham have made clear, we’re not particularly encouraged by this being the first stage. The main reason being: ALKS doesn’t pull over safely if something goes wrong. If it could proceed to a safe location – for example, a hard shoulder – then fine, but we’re a long way away from that.
“The government have set out the position – they want the UK to lead in this – but I am concerned that it could become confusing for the public when really autonomous vehicles come to the market as this technology really does just keep you in your lane.
“Admittedly, it’s a complicated area because of the historic legislation, but there’s a reason all insurers pay into Thatcham – they do a lot of great research – and I think their advice should be listened to.”
Very broadly, what are your views on the biggest claims made about self-driving vehicles?
DG: “The implications for car ownership are interesting, particularly for the younger generation. In my day, passing your test and getting your first car was all about mobility. Young people still want to get from A to B, but they want choices – they’re not so worried about ownership.
“The Highlands Transport Partnership is a good example of mobility as a service (MAAS) – providing access to buses, trains, cars and bikes through a single app. There are more flexible ways to have a car too, for example, to change model every month if you want.
“People talk about a world of zero collisions and, having dealt with serious accidents, it’s a great goal. We know that around 90% of accidents are due to human error. People do silly things and when you have pedestrians, cyclists and old internal combustion engine vehicles sharing a space there is risk. We’ll certainly be much closer to zero collisions once all cars are connected and automated.
“In the meantime, I expect the type of claim to change. Autonomous emergency braking (AEB) will mean less vehicles running into back of third parties, which are usually the most expensive. Assisted driving means there should be less slow speed collisions, and there are currently lots of those.
“It wasn’t so long ago that people started building motorised vehicles and it took around 30 years for that legislation to come in. I think what’s happening now with self-driving is very similar to that.”
Anything else you’d like to mention re self-driving?
DJ: “It’s an absolutely fascinating time to be involved in motor insurance. At the moment the UK is behind the US in terms of getting these vehicles on the road. In San Francisco the police pulled over a driverless car and it just drove off.
“Our role is to move with the times and provide end-to-end cover, to help you get from A to B, even via C and D, safely and on time. I know there are ongoing discussions between the ABI and The Society of Motor Manufacturers and Traders (SMMT) about what data we can receive from connected cars, and about standardising the format.
“In the here and now, AXA has just launched the STeP app, a digital claims solution on the retail side. We’ve developed it in-house and the thought that’s gone into it is amazing. It will dramatically reduce the time from notification to repair and customer feedback has been very positive.”