Testing time for insurers

The UK government has warned that traditional data sources for underwriting motor insurance will become obsolete with the emergence of connected cars.

Roads Minister Andrew Jones confirmed the Government’s intention to amend the Road Traffic Act 1988 motor insurance provisions, and announced a consultation to commence in the summer on driverless car insurance.

In response, telematics solutions provider Wunelli and LexisNexis Risk Solutions are urging insurers to start putting their data capabilities to the test.

Selim Cavanagh, VP telematics, for Wunelli said, ‘Insurers will need to calculate risk and develop products that support the use and adoption of driver assistance technology; ultimately they need to know how consumers are using the technology, actively and passively. To gain this understanding we firmly believe that insurers should be testing telematics data now to be in the best position for the transition to liability covers for semi and fully autonomous cars.

‘The success of driverless cars and the role insurers will play in this new technology will hinge heavily on the driving data that can be obtained and understood from those vehicles and Wunelli is working with OEMs to ensure that data is in a usable format.’

Rutger Van der Wall, vice president, international product development, LexisNexis Risk Solutions added, ‘There is a window of opportunity to use telematics during this testing time to gain the necessary insights and better understand the risks presented.

‘By working with OEMs, insurers can use the mass of data being collected from vehicles to understand the effectiveness of autonomous cars and how drivers interact with the capabilities of the vehicle. The data collected through telematics will be invaluable for underwriters and actuaries to determine their claims loss ratios and how the risk changes across the different level of autonomy.

‘Fundamentally, driving data, regardless of its source needs filtering, normalising and enriching to bring value. This is where insurers should be focusing their time right now, to fully understand the processes and possibilities. This will ultimately help them to commercialise and de-risk the driverless car opportunity.’