The following is an opinion piece written by Andrew Brown-Allan (pictured), director, Trak Global Group. The views expressed within the article are not necessarily those of Insurance Business.
It’s not a fun time to be a car. Oslo is still set on banning cars this year, the first capital city to do so. The Times (March 28) announced that UK car production has crashed to a six- year low.
Worse still, there’s evidence young children living near busy roads are more likely to develop psychosis. According to the Guardian, air pollution kills seven million people a year worldwide. In March, the UK government published its urban transport policy paper, which points towards some radical changes in the way we move ourselves through our cities in the future.
Not to be outdone, the EU has proposed that all new cars will be fitted with devices that make sure they automatically keep to the speed limit from 2022. I wonder how that announcement went down in the Porsche factory canteen? Or at Marinello?
Petrol heads may differ, but the EU’s call for the mandating of in-car safety technologies, such as speed limiters, is an extremely positive step. It’s hard to argue against technology that reduces the number of road collisions - 25,000 EU citizens lose their lives each year on Europe’s roads.
Also, the EUs decision to grasp the opportunity to improve risk management on the road, as cars become more connected, is at the heart of our own business, as a telematics technology company whose mission and purpose is safety. We have spent nearly a decade using telematics data to proactively manage driver risk and mitigate collisions. Young drivers using our technology have a 42% reduced risk of having an accident than drivers without it.
But the EU’s timeline is ambitious. Making e-call mandatory was first proposed in 2012, but it only became mandatory in April 2018. The delay was largely due to pressure from car manufacturers.
History might well repeat itself. The newly released EU report estimates the anticipated total impact (one-off and ongoing production costs) for car manufacturers will amount to €57.4 billion at present value cost, while at the same time not anticipating a retail price increase on new vehicles. This is likely to attract economic tension and therefore significant attention (and lobbying) from vehicle manufacturers.
Sadly, young drivers won’t appreciate the benefits from these new technologies for many years.
Trak Global’s data has identified that a novice driver’s vehicle in the UK is around eight years old, so it will be many years, possibly the 2030s, before the least experienced and most at-risk drivers benefit from these collision avoidance technologies as they work through the used car market. For example, it took nearly 25 years for ABS to filter down from high-end vehicles to become a standard feature.
So, EU regulators need to consider other ways to leverage technology to make motoring both safer and more affordable for the next generation of motorists. In the UK, the Chancellor announced a review of insurance premium tax (IPT) in his recent Spring Statement, so why not take the lead and reduce the IPT burden on young road users, especially those with telematics-type cover?
Telematics technology businesses will already be using connected cars to analyse driver risk. At TGG we are already working out how data from advanced driver assistance systems (ADAS) might correlate with a driver’s risk profile. For example, if we can read the frequency with which a driver overrides the vehicle’s proposed automatic speed limiter (which the EU says will be a ubiquitous feature in all new cars) that could provide new insight to determine how risky that driver is.
Telematics is not a static technology. It morphs, changes and reshapes itself all the time. Transport policy is also changing exponentially. Will the vehicle manufacturers be willing to move with the times too?