Industry to welcome driverless cars with cautious optimism: IBC

Industry to welcome driverless cars with cautious optimism: IBC | Insurance Business

Industry to welcome driverless cars with cautious optimism: IBC
While the American auto insurance industry is anticipating a more than 40% reduction in premiums once driverless car technology is fully adopted by 2050, the Canadian auto insurance industry would likely take a more cautious approach to vehicular automation, the Insurance Bureau of Canada (IBC) believes.

“When it comes to driverless cars, insurers will need to assess the risks and determine products and pricing based on those risks,” said IBC spokesperson Andrew McGrath. “Our industry is becoming increasingly information-based, technologically connected and even more globalized. A competitive market sparks innovative products and solutions.”

Earlier this year, Ontario became the first province to authorize the testing of driverless cars. Stratford is shaping up to be the first Canadian city to serve as a live testing ground for the technology.

“While testing is under way in Canada, a functional and available driverless car is a way out on the horizon,” McGrath told Toronto Sun. “That being said, the insurance industry is always there to identify new risks and provide the needed coverage. But for now, car manufacturers are racing to improve safety.

“Emerging technologies could lead to ‘zero fatality’ roads,” he explained further. “We already see high-end vehicles that warn you [when you] drive too close, alert you to vehicles in your blind spot, and even park themselves.”

A report published earlier this year by the Insurance Institute of Canada, entitled Automated Vehicles — Implications for the Insurance Industry in Canada, found that over the next 10 years and into the future, driverless car technology will shift responsibility for collisions from solely the driver to a hybrid of driver’s error and vehicle failure.

“The issues emerging as a result of vehicle automation will present many challenges for the insurance industry, regulators, and other stakeholders, largely due to the expected speed of change. Much preparation needs to be completed in a short period of time,” the report stated.

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