News in Brief: Driverless car risks a threat to motor insurance industry?
Driverless car risks a threat to motor insurance industry?
A raft of emerging risks in the growing industry around driverless cars have been highlighted by a number of UK experts.
Director of information protection at KPMG in England, Wil Rockall, says developers could be in the firing line for liability suits stemming from accidents. Or vehicles could be exposed to threats from hackers hijacking cars and potentially controlling them remotely, turning them into mules for criminal purposes or even using them as weapons.
“A hacker could redirect a whole bunch of traffic to gridlock a city or even kidnap people,” he was reported saying in Insurance Networking News (Online).
KPMG insurance practice partner Murray Raisbeck said while robotic vehicles don’t suffer from daydreaming and fatigue, the frequency of accidents would be a lot lower.
“However, if something does go wrong, the severity could be an awful lot greater,” he said.
Allianz SE product manager for home and motor insurance, Alan Gairns, said the change in liability could shift the burden of insuring accidents against accidents to carmakers, suppliers and developers while consumers would pay less.
“It is difficult to be precise on what impact driverless cars will have for us, but we know there are going to be issues.”
Brokers targeted in phone scam
Fraudsters have used premium rate phone lines to dupe companies out of money in the UK.
The premium rate phone numbers, which look similar to mobile phone numbers, are used by scammers who request quotes and then ask to be called back. Brokers who return the calls are then charged.
Complex product requests are often used to extend the length of the call, which can cost around 1 pound per minute.
Phone-paid services regulator PhonepayPlus said it was investigating and promising to fine providers who had breached its Code of Practice.
Insured cost of weather now over $135 million for 2014
New reports have taken the insured cost of weather-related damage this year to over $135.4 million, the Insurance Council of New Zealand announced today.
“This year is heading to be one of the most expensive years for insured losses as the final cost of the big Easter storm that hit the West Coast has risen to $55.3 million, up from the initial estimate of $45 million, and the provisional cost for the storm that lashed Northland, Auckland and the Coromandel in early July is $15.1 million,” ICNZ Chief Executive Tim Grafton said.
The Easter storm was the biggest event this year with about 10,000 claims and over $32 million in damage to homes, contents and motor vehicles.
“Homeowners also bore the brunt of the July storm with about $8 million of damage to homes and content, which highlights the importance of New Zealand’s generally high levels of insurance uptake to ensure a quick economic recovery at times like these,” he said.
Last year, insured losses from weather events was $175 million, the second most expensive year since 1968, the year of the Wahine disaster.
South Africa: insurance industry considers quake cover
A 5.5 magnitude tremor in Gauteng, South Africa last month has prompted the local insurance industry to question how prepared it is to cover quake damage.
Head of brokers at MUA, Warwick Scott-Rodger, said the tremors had been a wake-up call to review policy wording and prepare for large scale disasters.
Seismology experts say South Africa’s potential for earthquake damage comes in the form of natural seismic activity, mining-related events from deep underground mining, and from earthquakes occurring outside its borders but which are nevertheless strong enough to create some effect.
Scott-Rodger said a recent wording change to policy wording made on 8 August was made to keep in line with Treating Customers Fairly legislation.
Now, all new and existing MUA clients can claim for damage from quakes related to mining activities. It is also applying the benfit retroactively to cover all losses reported as a result of the 5 August earthquake.
“While the risks facing South Africa are certainly not as significant as a number of other regions, the insurance industry is aware of the earthquake risk and has factored it into premiums,” said Scott-Rodger.
Reinsurers are underestimating climate change exposure risk
Ratings agency Standard and Poor’s says that reinsurers are underestimating their risks of exposure to massive losses from climate change by up to 50 per cent.
The claim is based on the firm’s analysis of climate change disaster losses over the past decade, the biggest being those in 2005 and 2011.
S&P believes that many reinsurers are looking at climate change as a problem in the future rather than correctly assessing its impact now.
This, they say could affect reinsurer’s credit ratings and their capital adequacy.