The installation of technology in vehicles, from already commonplace GPS systems and telematics devices to fully autonomous vehicles, might offer a laundry list of benefits for drivers, operators, manufacturers and the insurance industry – including a way to lower the high cost of auto accidents caused by distracted driving – but the advancements also bring with them the serious threat of cyberattacks.
“The risks are endless,” said David Macknin, president and CEO of Chicago-based broker Alper Services who’s kept a close eye on the development of autonomous driving technology for two years now. “Autonomous vehicles have systems inherently that can start the car and stop the car, so the greatest single risk is a hacker taking control of the car entirely away from the operator [and] then propelling that car where and as fast as the hacker wants. It’s that simple, and you then have essentially a 3,000 to 6,000 pound weapon that is no longer in your control.”
The business risk to commercial fleets include bodily injuries and property damage that would result from someone seizing control of a vehicle and causing complete havoc, added Macknin. With vehicles being increasingly used in acts of terrorism, the autonomous vehicle also offers a route that is less dangerous for the bad guys.
“The perpetrator or the hacker is able to inflict widespread damage and death without sacrificing their own lives. They could be sitting in a bedroom or an office or a street corner controling the chaos,” explained Macknin, adding that for commercial auto insureds, there’s also the issue of business interruption to consider. “Once word got out about any such hack, that business operating the fleet would presumably be out of business – who would get in an AV with a fleet that’s been hacked?”
As a result, it becomes incumbent for underwriters and actuaries to try to come up with probabilities of these kinds of risks as well as corresponding coverages and pricing models, Macknin told Insurance Business.
The use of technology in fleets is already on the radar of trucking companies, especially as new federal transportation laws regulate the number of hours a driver can operate a rig based on monitoring using GPS systems. The downside is if that data falls into the wrong hands and is used for illicit commercial use, which could be damaging to companies, particularly if systems are hacked and data is released publicly, leading competitors to know their trucking routes or that they repeatedly violated time restriction laws.
While municipalities and medical providers are already well aware of cyber risk, commercial auto businesses are only just beginning to understand the threat this poses to their business.
“The trucking company owners and operators are now newly aware that with the GPS tracking and the monitoring comes the nefarious underside, which is - if we know where our truck is, how fast it’s going, how long it’s been driven - if that data were in the hands of someone it shouldn’t be in, that could be used in a hazardous manner,” said Macknin.