Self-driving automobiles and insurance coverage, with Ryan Stein



What are the assumptions baked into our auto insurance coverage insurance policies, and the way do self-driving automobiles problem them? Ryan Stein from Insurance coverage Bureau of Canada (IBC) appears on the implications that self-driving automobiles have on immediately’s auto insurance coverage legal guidelines.


  • On this episode of the Accenture Insurance coverage Influencers Podcast, we converse with Ryan Stein from the Insurance coverage Bureau of Canada (IBC).
  • Presently, people account for 90 p.c of car accidents—an assumption that’s baked into auto insurance coverage insurance policies all over the world.
  • Our present auto insurance coverage insurance policies aren’t geared up to take care of self-driving automobiles. Notably, if the auto producer or expertise have been deemed chargeable for an accident, injured events may find yourself negotiating product legal responsibility insurance coverage, which is extra advanced than auto insurance coverage.
  • Auto insurance coverage insurance policies have been challenged by the sharing financial system, and insurers can be taught from that have to proactively redefine auto insurance coverage for the arrival of self-driving automobiles.

Introducing the Accenture Insurance coverage Influencers podcast

Insurance coverage hasn’t modified a lot in 200 years, however the whole lot round it has. The bottom beneath insurers’ toes is shifting day-after-day, posing challenges—and creating alternatives.

We’re excited to announce the launch of the Insurance coverage Influencers podcast from Accenture. In season one, we deal with a number of the large questions on insurers’ minds. How will synthetic intelligence (AI) change insurance coverage? How can insurers innovate extra successfully? And the way can expertise allow fraud detection?

What self-driving automobiles imply for insurance coverage, with Ryan Stein

Our first visitor is Ryan Stein, the chief director of auto insurance coverage coverage and innovation at Insurance coverage Bureau of Canada (IBC). First, we talked to Ryan about self-driving automobiles and why they don’t match into immediately’s auto insurance coverage legal guidelines. Subsequent, Ryan mentioned an IBC working paper that outlines a two-part framework for a way insurers, governments and regulators can replace insurance coverage legal guidelines to accommodate self-driving automobiles. And eventually, we checked out basic rules for ensuring that insurance coverage legal guidelines are geared up to maintain up with rising applied sciences.

The next transcript has been edited for size and readability.

Inform me about Insurance coverage Bureau of Canada (IBC). What’s its position inside the insurance coverage business in Canada?

IBC is the nationwide commerce affiliation for Canada’s property and casualty insurance coverage corporations. We work with our members to look at the political and regulatory setting, and see if there are methods of bettering it for the advantage of insurance coverage clients throughout the nation.

I’m trying ahead to asking you about autonomous automobiles and what which means for the insurance coverage business. I need to begin with what folks imply once they speak about autonomous automobiles. I perceive that there are literally 5 designated ranges. May you fill in our listeners who aren’t accustomed to them already?

The 5 ranges of car autonomy—you may truly say that there are six, as a result of there’s degree zero—come from the Society of Automotive Engineers.

  • Degree zero isn’t any automation. The driving force is in full management of the car always.
  • Degree one has some driver help, like pace or cruise management.
  • Degree two can take management of each the car pace and lane place in some conditions—as an example, on a freeway.
  • Degree three is restricted self-driving, so the car could be in full management in some conditions. It may well monitor the highway and site visitors and may inform the driving force when she or he must take management of the car.
  • Degree 4 is totally self-driving below sure situations. It might be a sure space, sure climate situations or sure roads the place the car can deal with all of the driving capabilities.
  • Degree 5 is full self-driving. The car can do just about the whole lot with out the human needing to take management.

IBC not too long ago printed a paper on what you discuss with as automated automobiles. I’ve additionally heard the business discuss with autonomous automobiles. Are these primarily the identical factor?

Sure and no. Autonomous just about signifies that the automobile drives itself. I like to make use of the phrase “automated” as a result of you may speak about automobiles that also require people to play some management within the driving operation. They’ve automated capabilities, however they won’t be totally autonomous.

That brings us to the insurance coverage business and a number of the assumptions inside the insurance coverage business that automated automobiles could not match into. What are a few of these underlying assumptions that we’ve constructed into our present fashions of auto insurance coverage?

The primary assumption is that human error is the first explanation for collisions. The tort legal guidelines, legal responsibility legal guidelines and the legal responsibility protection that individuals purchase is all based mostly on this notion that people trigger collisions. And that’s as a result of proper now, people are chargeable for over 90 p.c of collisions. So it is smart that auto insurance coverage legal guidelines—and the protection that comes from them—will all be based mostly on that.

These assumptions about auto insurance coverage have been in place for some time and up to date improvements have challenged them. So, for instance, the sharing financial system, ride-sharing and car-sharing. How have been these a problem to the private auto business?

Previous to the sharing financial system, the insurance coverage legal guidelines have been written in a really particular approach. Mainly:

  1. An individual owned a car.
  2. That car was predominantly used for private or industrial functions.
  3. The proprietor of that car was the one who purchased the protection.

Every car just about had one coverage on it, and that coverage can be private or industrial—though you might purchase non-compulsory merchandise when you have been utilizing your car for industrial functions generally.

After which the sharing financial system and ride-sharing companies got here, and it began blurring the traces between private and industrial. Individuals have been utilizing their car for ride-sharing functions. The ride-sharing corporations needed to have the ability to supply a second coverage to these automobiles to cowl the ride-sharing, for when the ride-sharing app is on till the ride-sharing app is off. However folks that signed up for ride-sharing companies didn’t actually need to exit and purchase a separate coverage, or possibly their insurance coverage firm that offered their private coverage didn’t supply this ride-sharing coverage. So for that second coverage to be offered by a unique entity—the ride-sharing firm, not the person car proprietor—you wanted legislative and regulatory adjustments.

And now, since you have been going to have two insurance policies on a car, you wanted guidelines or processes to handle claims. If a collision occurred with a type of automobiles, it wanted to be straightforward to determine which insurance coverage firm pays. Was the app on or off? After figuring out that, you might transfer ahead with the claims course of. So it was an instance of insurance coverage legal guidelines needing to be up to date—to accommodate a unique kind of car use in a unique kind of enterprise mannequin.

Proper. And it strikes me that there are a variety of similarities to what we’re taking a look at now with automated automobiles. Lots of the dialog has been in regards to the shift from a private auto coverage to one in every of product legal responsibility. Specifically, if there’s an accident, and it was a automobile that may drive itself, was it the driving force or was it the producer? Are you able to speak about a number of the different implications for insurance coverage?

Proper now, people are chargeable for greater than 90 p.c of collisions and all of the auto insurance coverage legal guidelines and protection relies on that. So proper now, if there’s a collision, folks go to their very own insurance coverage firm and so they get sure advantages, and in the event that they want extra and so they weren’t chargeable for the collision, they’ve a possibility to pursue a legal responsibility declare or sue the individual accountable. With motorized vehicle claims, there are tens of 1000’s of them a yr, and you determine, OK, what the trigger and was who at fault? From that, right here’s how a lot will get paid out for the declare.

However in a world the place it wasn’t the individual that prompted the collision—if it was the expertise at fault—nicely, then you definately’re exterior auto insurance coverage litigation. Now you’re taking a look at product legal responsibility litigation in opposition to the car producer or expertise supplier. That’s much more advanced and takes rather a lot longer than your typical motorized vehicle collision legal responsibility claims.

When you have folks which can be injured in a collision that was brought on by automated car, they’ll get some protection from their very own insurer, but when they want extra they’re going to need to go up in opposition to a car producer expertise supplier. It’s now not a motorized vehicle legal responsibility declare, which signifies that individual may now be ready rather a lot longer to get compensated.

And from a public coverage perspective: auto insurance coverage is closely regulated, and at IBC we imagine the legal guidelines that underpin it ought to ensure that people who find themselves injured have entry to honest and fast compensation. We see automated automobiles difficult the auto insurance coverage legal guidelines which were in place for many years, and we expect there’s a must replace them. They need to mirror the dangers related to automated automobiles, so that you don’t have folks injured having to proceed by means of pricey, protracted product legal responsibility litigation.

That’s an ideal level, Ryan. Thanks for making the time to talk with me immediately.

It was my pleasure.


On this episode of the Accenture Insurance coverage Influencers podcast, we talked about:

  • Six ranges of driving automation, as outlined by the Society of Automotive Engineers
  • The underlying assumptions baked into auto insurance coverage insurance policies and legislation, and the way they have been challenged by the sharing financial system
  • Why immediately’s insurance coverage business isn’t ready for automated automobiles, and why that ought to concern customers

For extra steerage on self-driving automobiles:

Within the subsequent episode, Ryan will share a two-part framework that IBC developed for automated automobiles and the way it addresses the opportunity of injured events having to barter product legal responsibility insurance coverage. And, we’ll speak in regards to the challenges and alternatives that self-driving automobiles pose for insurers.

What to do subsequent:

Contact us when you’d prefer to be a visitor on the Insurance coverage Influencers podcast.