Insurtech Magazine July 2023 | Page 68

APOLLO IBOTT 1971
conversely , a 99.99999867 % safety rate . Autonomous vehicles will have to be better than that to be accepted as a ‘ safer ’ technology – but thanks to advances in artificial intelligence and machine learning , that ’ s plausible .
“ It ’ s clear that autonomous vehicles lead to a huge reduction in the frequency of loss and the frequency of accidents , which is something we can all be supportive of ,” Moore says . “ You will also see a reduction in the severity of injury . Autonomous vehicles will react quicker ; they have quicker braking times and quicker response times so , if an accident cannot be avoided , you ' d like to think that collision would be at a lower speed .”
Despite the road safety improvements , that won ’ t necessarily mean that insurers are better protected against claims . In fact , the severity of insurance loss could be a lot higher . This is because – in the same way that only AV crashes , and not successful AV journeys , make the headlines – the rare occasion when AV technology still causes injury or death will be highly exposed to so-called ‘ nuclear verdicts ’, where the AV operator is taken to court and sympathetic jurors award damages in excess of $ 10m . It often falls on the operator ’ s insurer to cover those damages . Take an already precarious situation when it comes to nuclear verdicts , and add in the supposition that these technologies are safe to use , and it becomes clear why this problem will only get worse in future .
Chris Moore says : “ It will be a lot harder to defend autonomous vehicle claims because of that big nuclear verdict approach that plaintiffs might take . Where a standard human fleet operation might only buy $ 5m or $ 10m of auto liability in the United States , I think you ' ll probably see autonomous
68 July 2023