Automated Vehicles: Implications for the Insurance Industry in Canada

Semi-automated vehicles have begun to replace conventional cars and trucks on Canadian roads. As conventional vehicles share the roads with semi-automated vehicles (sometimes referred to as autonomous cars) and the first driverless cars, the challenge for the insurance industry over the next 10 years will involve determining who is responsible for collisions.

Automated Vehicles: Implications for the Insurance Industry in Canada is an important report that assesses the developments of automated vehicles on Canadian roads within the next 5-10 years, and raises many questions for the insurance industry:

• Will vehicles have on-board devices to identify whether or not the vehicle’s technology was engaged at the time of a collision?
• Will insurance companies be allowed to access this information?
• How will insurance companies recover costs when automakers are found to be at fault?
• How can property and casualty insurers reduce their risk of loss?
• How should costs be shared when driver errors and vehicle automation systems failure both contribute to a collision?

As the frequency of collisions resulting in serious injuries and vehicle damage decline for new, semi-automated and self-driving vehicles, this will be offset by the expected higher cost of repairs for vehicles that experience collisions. As a result, the impact of vehicle automation on insurance claims costs and industry revenues will only begin to emerge over the next 10 years.

It is important for the insurance industry to begin now to prepare for the extensive changes automated vehicles is expected to ultimately bring for the industry.

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If you have any questions or comments about the upcoming automated vehicles report, contact us at iicmail@insuranceinsitute.ca.