Transportation network companies
like Uber, Zipcar, Lyft are springing up in
cities around the globe — creating a new
transportation option, as well as coverage
issues for insurers. Technology is changing the ride options for millions of consumers as smartphone users can access a
number of transportation options.
All of these factors will have some impact on car insurance including who is insured, who isn’t, who is liable in case of an
accident and what coverage is required.
4 Self-service insurance Mobile apps are changing the way insurers provide services to
their customers who can now purchase
insurance online, file a claim or follow the
claim as it progresses.
Insurers like USAA, Allstate and State
Farm have apps that allow customers to
send photos of claims to a desktop adjuster who guides the policyholders on
what pictures to take so they can file the
first notice of loss even faster and more
completely. The apps can also provide
feedback, driving tips and other helpful
information to help insureds reduce or
manage their risk.
Policyholders are demanding access to
insurers and information via their mobile devices on a 24/7 basis and for insurers the challenge involves meeting those
needs without losing the personal interaction with customers.
5 Autonomous cars Self-driving cars are closer to be- coming a reality. Google has been
testing vehicles for several years and ex-
pects to introduce a working car by 2020.
Volvo, Toyota, Mercedes and Audi are all
testing autonomous cars as well. Some
will be fully autonomous and others will
allow drivers to switch back and forth be-
tween automatic driving and allowing the
human driver to have control.
Since Google introduced their prototypes, they have traveled 1.2 million
miles on public roads, obtained a top
speed of 25 mph and can actually be
summoned by a smart phone. Volvo expects to have its cars tested on city streets
by ordinary drivers by 2017. But all of
this autonomy raises several interesting
issues for insurers:
accept liability for accidents involving
their technology, the responsibility
shifts away from the driver to product
liability for manufacturers, which in
turn will impact insurers.
•;Given;the;number;of;recalls;the;indus-try saw in 2014 for air bags, ignition
switches and other parts, this opens
up areas of subrogation for suppliers
whose parts are defective or malfunction in autonomous vehicles.
from the car being autonomous to the
driver being in control — who will
be liable if there is an accident — the
Manufacturers need to be aware of
the vulnerabilities associated with autonomous cars and how to address them.
Insurers should consider how they will
provide coverage to manage the risks with
6 Product recalls In 2014, more than 16. 5 million vehicles were sold, but it was a
record-setting year for recalls with
63.7 million vehicles recalled for everything from ignition switches to faulty
airbags. The previous record was 30. 8
million in 2004.
With self-driving cars, product liability
could significantly increase for manufacturers and their insurers.
7 New technology When it comes to new technology for property adjusting, there are a
number of exciting options from compa-
nies like Spike, Spex, and Livegenic that
allow adjusters to use tablets, cell phones
like the engine block, hood and fenders;
significant usage for the roof, rails, sus-
pension and doors; and high use in ve-
hicles that were almost completely com-
posed of aluminum.
Claims severity was 20 percent higher
for high aluminum content cars compared to 9 percent for medium-use vehicles. Repairable claims were 19 percent
higher for high-use vehicles vs. 5 percent
for medium-use autos.
A third analysis compared the BMW
5 series (model years 2004-2010) and
conducted a specific point by point comparison of side, front and rear impacts
for aluminum cars. In front-end collisions, impacts for aluminum vehicles
cost 20 percent more than steel vehicles.
There was a 10 percent decrease in collision costs for rear impact crashes, but the
study organizers said this wasn’t statistically significant, nor were the side impact
figures. They concluded that aluminum
vehicles had higher collision claim severi-ties than steel cars and the more aluminum used, the higher the claims.
As more body shops become equipped
to repair aluminum vehicles, this could
drive repair prices down. Currently, there
are significant costs for training and set
up since aluminum vehicles must be repaired in a facility separate from steel
cars because the aluminum particles will
break down steel. Aluminum repairs also
require different tools and techniques,
which add to the costs.
3 Millennials Fewer millennials are buying cars, which reduces the number of insurance policies. They have a lot of ride-sharing options or they live close enough
to work to take mass transit, walk or ride
their bikes. In addition, public transportation apps are changing the way people
26 JANUARY 2016 Claims Magazine PropertyCasualty360.com
A host of risks will create coverage challenges
for insurers ranging from new technology
to legalized marijuana and fracking.