The major trends in the development of motor insurance, including telematics and pay-as-you-drive solutions, were among the topics debated during the third part of the Motor Insurance Conference taking place at FIAR 2018.
Evgeny POTOKOV - Senior Underwriter South Eastern Europe, SCOR Global P&C Deutschland- Many decades ago, people were dreaming about automated vehicles - telematics is not a new idea
- Why do we need automated vehicles, in general? Automated vehicles come hand-in-hand with anticipated reliefs such as:
- Increased safety level (daily 3.500 fatalities on average worldwide, which is in over 90% of the cases caused by human-error)
- Additional free time while driving - it is definitely a beneficial aspect
- Increase of mobility especially for elderly and young people
- Improvement of traffic efficiency, resulting in less congestions and low emission values
- However, the advent of automated vehicles will change the insurance landscape sustainably: a decrease of likelihood of occurrence will directly influence the development of motor insurance premiums
- There are 6 stages of automation (0 to 5) - we are currently at level 3, "Conditional Automation"
- Necessary conditions for automated vehicles to work optimally:
- Sufficiently precise sensors (cf. Uber accidents)
- Decent computing power within the vehicle (Nvidia: 20 TOPS (trillion operations per second))
- Stable, broad and adequate network access (cf. 5G internet)
- Sufficient and adaptable algorithms (cf. ethics) - we don't have yet a solution for such ethical aspects
- There are several very important aspects when it comes to automated vehicles: technical advances (Impact on safety level, cyber-attacks as emerging risks), social and human sciences (acceptance of AV, human-machine interaction, mobility usage behaviour), law aspects (allocation of liability, data protection) and economic aspects (Customer interface, Technical underwriting-approach, new market players)
- The advent of automated vehicles is already taking place and will change the respective motor markets and corresponding insurance sector sustainable
- This transformation will take place at different paces depending on the characteristics of the underlying market and country
- There are 17 OEMs (Original Equipment Manufacturers) and over 500 suppliers in Germany. Overall, Germany is one of the leading automotive nations, especially in terms of its' industrial performance (OEM-activities and conducted research)
- Penetration of automated driving in Germany: since the technology is quite complex, we expect some delays in the introduction of new technology
- Automated vehicles do not represent the end of motor insurance business, but will change it sustainable due to a transformed risk landscape. However, this advent is already taking place
- Different levels of automation require different pre-conditions whereas jurisprudence and (digital) infrastructure are most crucial ones. These factors directly influence the acceptance and, hence, the penetration of AV in the respective markets
- Systems are evolving over years until a certain degree of technological perfection is reached. The respective degree implies the performance of systems and hence, the required risk premium for AV
- Insurers need to distinguish between the respective Levels of automation to ensure homogeneity within the portfolio and provide an adequate underwriting-approaches customized for each Level of automation. By focusing only on fully autonomous vehicles and, hence, the final stage of this technological progress, risks which evolve over the intervening years could be overlooked. Even lower levels of automation already have an impact on the frequency and severity of losses and could lead to an unknown accumulation of risks
Calin MATEI - Director General Adjunct, GROUPAMA Asigurari- Is telematics the solution of the future in motor insurance? Probably, until we reach autonomous cars, we can discuss telematics.
- By 2020, we estimate we will have a critical mass of connected cars. And then we can talk about a real market for telematics cars. Regarding autonomous cars, we are probably looking at a 2030-2040 horizon, so as to be a daily reality on the streets, including in Romania.
- I think that the most important thing is that the motor insurance of future won't be as we are creating it, but will very much depend on the client of future. Depending on who will use the car, the customer will ultimately decide which is the general trend.
- We need to continue to experience, to better understand the consumer of the future, in order to understand the future.
- Telematics is a technique for transmitting and automatically processing information over long distances, through satellites and other modern communication processes. It's a very simple thing: you have a car, you put a blackbox on it, it sends data to a server, you have a set of algorithms that interpret the data and provide you a score, a score you apply in your pricing model, whether it is Motor Hull or MTPL.
- Traditional products depended purely in the vehicle and driver data. Now, we have realized that the driving style is more important than the age or where the driver lives. The way he drives the car is more relevant.
- In our opinion, this telematics solution is a win-win for all parties. The customer can reduce the policy price, of he/she has a good driving style, receives additional services (immediate assistance), there is also the possibility of locating the car if stolen. As for the insurer, he understands the risk much better and offers the right price because it collects relevant data. It also adds value to the ecosystem - a low-risk road accident environment. Also, increases Motor Hull accessibility.
- (as for GROUPAMA Asigurari's product) it starts with a 20% discount (from the Motor Hull premium). After 6 months, about 70% of customers reached the maximum discount of 40%. And 1 out 5 eligible customers for this contract chooses telematics.
Cristian MICU - Country Manager, EUROTAX Romania- We are present in more than 30 European countries and we are known under 4 brands: Schwacke (Germania), Glass's (UK), Autovista si Eurotax. Since 2017, we're operating under one group: Autovista Group.
- Each subsidiary of the group produces and consolidates a specific database for each country where it is present.
- The products we have on the market: the basis of our information lies in processing data on the technical and commercial specifications of all cars marketed on the official channel in Romania. Moreover, we have apps that can calculate residual values for markets in Europe - we have 16 markets where we have consolidated this information.
- Basically, we have information before a car is launched and until the moment total damage is reached. To this end, we have information about the moment when it reaches the dealer and is offered to customers, the residual value of the car over time - basically, we can predict a depreciation of the car - this aspect is very important on leasing companies and insurers because they know what amounts this cars must be secured. We are covering the entire life cycle of cars at the most detailed level.
XPRIMM Circle of Debates: What are the advantages of implementing new technologies and are there any difficulties?
Mariusz WICHTOWSKI, General Manager, Polish Motor Insurers' Bureau:
- So far, there have been only attempts to regulate the problems regarding liability and legal responsibility when it comes to autonomous vehicles. No solutions have been found so far.
- There were several accidents with fatalities in Europe, in China and USA caused by autonomous vehicles. We don't have enough knowledge yet on how to secure this autonomous system.
- The risk of cyber-attacks is less probable than the failure of the system. System failure is much more common and more likely to happen.
- In a few days we will have a new regulation - GDPR - which brings new questions: who will be the possessor of the data? Do we have the right to tell them not to keep our data? In case of telematics, should insurance companies own our data? Automotive companies and insurers are currently trying to obtain the right to own the data. There are many aspects to be taking into consideration and I am afraid that we can't yet find an answer. There is no country in which such a legal aspect was clarified so far.
- The Romanian market is at the beginning when it comes to implementing telematics. Currently, only an insurance company uses, officialy, the telematics system. Another two companies on the market have a pilot project that uses telematics, but the whole picture tells us it's a very good system, that brings advantages for both insurance companies and insured people.
- I am confident that in the future, if the implementation process is accelerated, there will also be multiple questions, legal and technical issues, regarding on who owns the information, who uses it in the best possible way, whi can identify the best solution in this regard.
- But I personally see the situation as an issue, a challenge, and I consider that the Romanian market should take advantage of these products and, if I were the director of an insurance company, I would implement tomorrow a telematics pilot project.
4467 views
