Munich Reinsurance America Inc.’s Mobility Domain unit will begin offering insurance solutions for low-speed autonomous vehicles, the company said last week.
Launched in 2015, Mobility Domain focuses on establishing strategic partnerships and pilot projects that enable Munich RE and its clients to research and develop better underwriting practices for future mobility, including research with vehicle telematics, shared mobility, crash avoidance systems, and autonomous driving.
“We understand the need for cost-effective risk solutions for owners, operators, and retrofitters of low-speed autonomous ride services. Our solutions fill unmet needs in the emerging autonomous vehicle market,” the company statement said.
While fully autonomous vehicles are still in their infancy, low-speed autonomy has been gaining traction. Companies like Tesla offer low-speed autonomy through its Autopilot and “Summons” feature, while the Volvo S90 has low-speed driving assistance systems that drive the car under 30mph and control steering, acceleration, and braking at up to 80 mph. Nissan also plans to produce cars that are capable of autonomously driving in slow-moving traffic by 2020, and it has already showcased this with a Leaf last year in Tokyo; Cadillac has its own “Super Cruise” technology which will debut this fall.
Despite the ongoing progress in AV development, insurance has been slow to adapt because of the murkiness surrounding liability and premiums. But as vehicles enter into full autonomy, there will be a “tipping point” in the insurance industry in which policies will go from being personal to being commercial, Mariel Devesa, head of product innovation at Farmers Insurance, said previously.
In the short-term, the cost of insurance will continue to rise, and the frequency and severity of insurance claims will increase, she said. But, in the long-term, as autonomous vehicles are factored in, “It’s no longer going to be a personal policy — which is human error,” Devesa said. “It shifts over to a commercial policy as you add technical failures [of the vehicle].”
And while autonomous vehicles currently tested on the road are insured, Munich RE appears to be the first auto insurer that is coming out publicly with a policy designed for vehicles with a certain level of autonomy. Munich RE writes primary and reinsurance policies, predominantly for commercial lines insurance, according to the company website.
Munich RE did not respond to a request for comment.Like This Post