Why Are UK Insurers Demanding Driverless Car Data?

Insurance companies worldwide are busy preparing for the introduction of driverless cars on public roads. Like other new disruptive technologies, many groups believe that some customers will be thrown into a state of confusion while operating fully and semi-autonomous vehicles. For example, a driver could forget to switch on autonomous mode before taking a nap, resulting in a serious car accident (Will there be a safety mechanism in place to prevent such occurrences? We simply don't know yet).

Based on the scenario above, it's safe to say that future drivers and passengers will need to educate themselves on the robust functionality of self-driving cars. But such measures are not enough to discourage curious individuals from pushing the envelope of standard operating practices. For insurance companies that are developing new coverage guidelines and packages for self-driving car owners, it is essential to know how the vessels are being used on the road.

Understanding Autonomy in Cars

To better understand who should take the blame (driver or the technology) during accidents involving autonomous cars, the Association of British Insurers (ABI) is pushing for the collection of fundamental data that covers roughly 30 seconds before and 15 seconds after an accident occurs. The types of information that the ABI is seeking includes the following: GPS records (time and location), activation of autonomous features, mode of operation (if in autonomous mode), manual driver activity, occupation of driver's seat and usage of seat belt.

"In 2019 you will be able to buy a car with an autopilot system where you can take your hands off the wheel for up to three minutes. But that will only work on a motorway," explained Matthew Avery from Thatcham Research Center.

If granted, the ABI intends to use this information to establish grounds for liability and improve the accuracy of insurance claims during processing. Furthermore, the treasure trove of data available could help emergency investigators clamp down on such increasingly complex incidents.

Cracking Down on Big Data

Should consumers be concerned about the ABI's request for sensitive car data? According to the UK's Financial Conduct Authority (FCA), the answer could be yes. Last month, Andrew Bailey, chief executive of the FCA, drew attention to the use of big data by local car insurance establishments.

"Big data could be used to identify customers more likely to be inert, and insurers could use that information to differentiate pricing between those who shop around and those who do not. The latter pay more and thereby can cross-subsidize those who do shop around," said Bailey.

In agreement to the FCA's views on the unfair use of big data, Facebook blocked Admiral, a UK-based car insurance company, from using social media profiles to determine pricing and coverage for customers. Facebook stepped in hours before the campaign was due to be launched. Admiral was intending on leveraging status updates and "likes" made on the social media platform during the risk assessment stage for first-time applicants. Based on the car insurer's criteria for safe drivers, individuals displaying risky behavior on Facebook were less likely to receive insurance discounts.

Michael Cheng

Michael Cheng is a legal editor and technical writer with publications for Blackberry ISHN Magazine Houzz and Payment Week. He specializes in technology business and digesting hard data. Outside of work Michael likes to train for marathons spend time with his daughter and explore new places.