Insurers at odds over Australia’s driverless future

Public news

Suncorp Chief Executive, Steve Johnston, made a bold claim recently that driverless cars would mean no more car accidents by 2030.

Mr Johnston said, “In 10 years’ time, motor vehicles won’t have accidents.”

“So, the traditional motor insurance policy of fire, accident and theft won’t be relevant. There will still be hail damage but increasingly the key underwriting activity in motor insurance will be cyber relative to all the software sitting in a vehicle.”

IAG Chief Executive, Peter Harmer, says that the 10-year timeline that Steve Johnston has quoted for the ‘end of motor vehicle insurance’ doesn’t add up.

Mr Harmer said, “When driverless cars arrive and they are permitted to travel on roads, the built environment is going to take a long time to catch up with the capability of the vehicles themselves.”

“It’s our expectation that what will happen is there will be major motorways where it’s considered appropriate for these vehicles to operate in a driverless fashion and there’ll be a long time before the built environment around our capital cities outside of these motorways is ready to support these kinds of vehicles, and even longer for regional and rural Australia.”

IAG conducted work in 2018 suggesting that by 2040, driverless vehicles will only account for 48 per cent of cars on Australian roads. Going by this prediction, we may have a large mix of vehicles by 2040 featuring zero (no automation) to five (fully automated) levels of autonomous technology on Australian roads.

Steve Cratchley, Pricing Manager – Asset and Advacnced Technology at Suncorp, said recently, “Cars are going to be connected and sharing a lot of data all the time, and the great thing about that is that there’s no argument about fault.”

“There is some overlap, and a mixed-mode environment. We’ll have old, classic vehicles alongside new Teslas, and that’s going to be a bit of a challenge.”

“If you have an accident, the amount of data generated by vehicles that can be shared with insurers will allow fault to be determined within seconds. Claims should be able to be processed within a minute, including ordering the parts needed for repair and pointing people towards the right repairer”, Mr Cratchley said.

Worryingly, is Mr Cratchley’s quote, “…pointing people towards the right repairer”.

The right repairer is the one the customer chooses, not the insurer!

Comments such as this are further evidence of the steering tactics and avenues in emerging technology that insurers may continue to use against consumers if a mandatory Code of Conduct does not govern the industry and protect vulnerable small to medium sized collision repairers.

It will be critical to the collision repair industry that the government enforces a Code of Conduct to protect repairers from the imbalance in market power, predominantly from insurers and their bullying or steering tactics that attempt to send a customer towards the insurer’s preferred repairer or not honour claims.

Regardless of when we reach an increased autonomous vehicle fleet in Australia, it will be important for collision repairers to keep up to date with advancing technology in order to service new vehicles entering the market. These vehicles will require not just panel repair but recalibration of sensors and other vital equipment, essential to keeping autonomous vehicles safely on the road.

Perhaps an important question that the industry and insurers need to ask themselves is; are we ready for fully autonomous vehicles and has every stakeholder in the industry been considered and planned for? We are a nation that loves to be involved in ‘the drive’ - Are we ready to hand that over 100 per cent to a robot?