Artemis ILS NYC 2019


Reinsurance News

Motor premiums must reflect improved safety from tech advances

29th November 2017 - Author: Luke Gallin

Using Tesla as a case in point, GlobalData has underlined the need for motor premium pricing in the UK for owners of vehicles that are equipped with the latest technological advances, such as autopilot, to reflect the improved safety of driving.

TeslaElon Musk’s U.S. automotive and energy storage company, Tesla, is often making headlines for its revolutionary use of technology to improve road safety for drivers. One such technological advance is the company’s autopilot feature, which, via the use of ultrasonic sensors and cameras enables the vehicle to perform manoeuvres and match the speed of surrounding traffic conditions, without the need for any input from the driver.

It’s been shown that Tesla’s autopilot reduces the risk of an accident and substantially improves the safety of driving, but, so far, this isn’t reflected in the pricing of premiums for owners of vehicles equipped with this type of technology.

Financial Analyst at GlobalData, Daniel Pearce, commented; “Clearly the exponential advances in this technology have made driving much safer, as the potential for driver error is removed from the situation once the Tesla autopilot is engaged. Crash rates across all Tesla models have fallen by 40% since the introduction of the autopilot system, illustrating how this technology has significantly improved the safety of driving. However, when owners seek to insure their Tesla vehicles, this is not reflected in the pricing of premiums.”

In an effort to reverse this, GlobalData explains that Tesla has partnered with numerous insurance companies across 20 countries via the Insure My Tesla scheme, which is designed to enable Tesla owners with access to insurance protection that reflects the increased safety of its vehicle.

In the UK Tesla is collaborating with insurer Direct Line, and with more than 2,500 Tesla vehicles with autopilot capabilities now on UK roads, GlobalData expects demand for policies that reflect increased safety standards to grow in the years ahead.

“Naturally the insurance industry will gradually respond to these developments, but the current pace of acknowledging the safety improvements such technology is bringing is far too slow. The industry should seek to collaborate with vehicle manufacturers in order to better understand the latest technology and how it can improve driver safety – in turn this will allow for customers to receive lower insurance premiums,” said Pearce.

Recent Reinsurance News

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous article:
U.S. reinsurers’ profits fall as combined ratios spike in 2017: RAA

Data on the performance of a group of U.S. property and casualty (P&C) reinsurers for the first nine months of...