Drivers are getting a “sixth sense” today in the form of driver assistance technologies designed to emit warnings and, in some instances, apply the brakes automatically to avoid collisions.
In the era of distracted driving from texting, talking on cell phones or sometimes doing both at the same time, technology is predicted to play a critical role saving lives on the nation’s roads. According to the National Highway Traffic Safety Administration—NHTSA--in 2017 alone 37,133 people died in motor vehicle crashes, with the greatest number tied to human error.
In this issue, we will cover the insurance implications as well as some of the latest advances in driver assistance technologies, such as automatic braking systems, collision avoidance systems, sensors that can detect signs of drunk driving and how 5G is being tested in driving safety trials.
Underwriting losses are driving insurance policy rates skyward
Before you get too giddy about tech assist for drivers, the upward trend in commercial auto insurance rates continues to challenge providers and policyholders alike. Fitch Ratings, Inc. published a recent report warning that commercial auto policyholders will see price hikes in 2019 as U.S. property/casualty insurers reduce capacity in light of continuing losses in this segment.
Is technology the remedy?
Insurers could ultimately restore balance thanks to advances in technology and analytics. And telematics can offer valuable data on driver and vehicle activity, particularly in the area of personal auto.
According to Fitch, “advances in technology offer potential for greater operating efficient and performance improvement for commercial auto underwriters.” In fact, information gathered from telematics, data from third-party sources and even electronic logging devices can improve information quality and streamline the process to boot.
The hazards and the potential of automatic braking systems
Imagine you’re barreling down the open highway with no other vehicles in close proximity. Suddenly, you lose control when the automatic brakes bring the car to a sudden and screeching stop. According to a Wall Street Journal article, this happened to one driver of an SUV that slammed on the brakes while going 65 mph, and for no apparent reason.
NHTSA started looking into the more than 400 complaints about auto-braking systems that have arisen over the last several years. Major car manufacturers that offer auto-braking systems are cooperating. The technology features cameras, sensors and radar to detect objects. If the driver doesn’t respond quickly enough, the brakes will deploy automatically. Sounds good, but like any new technology platform, there are flaws that need working out.
However, the overall statistics are quite positive. In June 2018, the Insurance Institute for Highway Safety reported that rear-end collisions are now 50% lower in cars with auto-braking technology. Although more and more new cars feature this type of braking technology, there is a learning curve for drivers. This technology won’t be going away. Instead, it will be updated along with proper training information for consumers.
Collision avoidance systems save lives, but adoption is slow
More than 55,000 injuries from car accidents could have been avoided through the use of collision avoidance systems, according to a 2015 study by the Insurance Institute for Highway Safety, or IIHS. But by 2017, only 6% of new cars in US dealerships were featuring things like lane departure warning systems (also known as lane keeping safety—LKS--systems.) And only 9% had blind spot alerts as standard equipment.
The problem is money. Collision avoidance systems are typically offered as part of a safety package, and this adds several thousand dollars to the price of the vehicle. Then there’s the problem of getting drivers to use the systems even when they have them. Some drivers actually turn them off, annoyed by the loud beeping that warns ‘you’re drifting into another lane.’
Nevertheless, the safety statistics are compelling:
- 11% reduction in single-vehicle, sideswipe and head-on crashes with warming systems were onboard
- 21% lower rates of injury in the same types of crashes
- 50% lower crash rates revealed by two studies on the effectiveness of lane departure warning systems — one focused on U.S. trucking fleets and the other on a brand of car in Sweden.
In the future, your car will be able to tell when you’ve had one too many
Imagine you’re driving home after a few drinks with friends. Your cognitive skills are less than ideal. Your car slows down and comes to a stop--it’s onto you. According to BestRide.com, a major automobile manufacturer is developing technology using cameras and sensors that can recognize when a driver is intoxicated. When a driver starts to weave, reaction time is slow or they fail to steer for a period of time, the safety technology slows the car and may stop it altogether.
In 2017, NHTSA reported nearly 11,000 deaths due to drunk driving accidents — approximately 30 fatalities per day. Also, intoxicated driving often results in life-changing, catastrophic injuries that impact insurance costs dramatically. Look for more auto-makers to embrace these new preventative technologies.
5G offers a first-ever virtual experience for race car fans
One mobile technology giant is using 5G to put racecar fans right in the cockpit thanks to mmMave technology – a sensing technology capable of delivering super-fast data speeds and capacity.
A recent post on FierceWireless said, this “provides a look at how mmWave technology can help create new experiences for moto-sport event fans.” A combination of augmented and virtual reality provided 360-degree video streams from cameras inside the car. This way, fans could view the race from the driver’s perspective while hitting speeds as high as 130 mph.
This has been a difficult market for commercial auto insurance renewals. We have seen increases from 7% to as high as 30% this year. Automotive safety and the technological innovations that go along with it will continue to evolve. The added expense of repairing vehicles with added sensors and safety features is also increasing dramatically.
We are still far off from autonomous and accident free vehicles. The insurance industry’s data is quite compelling. These innovations are actually reducing accidents and making the roads safer. If these become legislative mandates such as seatbelts, the costs of the vehicles as well as the insurance will continue to rise.
Ultimately when roads become safer we should see more stable auto insurance pricing. We will continue to monitor these trends at Gallagher. Stay tuned.
