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Report Points To 'Standoff' Between Insurers, Automakers On Self-Driving Data

Cars in a parking lot
Gene J. Puskar
A parking lot full of Uber self-driving Volvos in Pittsburgh.

Auto insurers and carmakers must overcome corporate secrecy concerns and find a way to collaborate on data-sharing to facilitate the shift to higher levels of autonomous driving.

That’s the No. 1 recommendation in a comprehensive new report from the Rand Corporation about autonomous vehicles (AVs) and the auto insurance industry. The research, based on interviews with dozens of experts, was released last month.

Generally, those experts feel that the existing auto insurance framework will be able to adapt to the deployment of AVs, which will shift the concept of liability from the driver to the vehicle’s manufacturer. But a few things have to happen first.

"You have a real standoff right now between the manufacturers and the insurers."

One of them is data-sharing.

“It’s really important,” said Karlyn Stanley, lead author of the Rand study. “Because insurers will tell you they need information about what sort of capabilities a vehicle had, especially as we progress with automation, so with any accident they can really determine liability. Who was at fault, or what was at fault? Insurers say they need more data, and it’s a lot of data that’s created by highly automated vehicles.

“On the other hand, manufacturers are very concerned about providing that information because they think it has a lot of proprietary information embedded within it,” Stanley said. “And, of course, this is a competitive environment where manufacturers are all trying to develop their own highly automated vehicles.”

“So you have a real standoff right now between the manufacturers and the insurers,” Stanley said. “The manufacturers say, ‘Oh the insurers can get the information in other ways.’ And the insurers say, ‘No no no, we must get it from the manufacturers.’ Government folks are watching this situation, hoping the industry will work it out for themselves, in terms of some sort of collaboration.”

That means regulators might need to step in to force that data-sharing.

“Regulators are loathed to do that. They want to see the industry work it out,” Stanley said.

Bundling insurance

As cars and trucks become more automated—as humans become less active behind the wheel—manufacturers may start selling insurance as part of vehicle purchase process, experts said. Some of that has already been signaled. Rivian, the electric automaker that’s building its vehicles in Normal, was staffing up its Consumer Insurance Team last year.

Other experts think AV makers won’t go that route because they lack the “core competency” required to do insurance well, including the complexity of handling claims. And some think manufacturers may simply buy up insurers and bring them in-house.

“There’s a real split in view in terms of how insurance at those higher levels of automation will really be handled,” Stanley said.

Bloomington-based State Farm is McLean County’s largest employer. Will companies like State Farm need as many employees once the roads are filled with high-level AVs?

“Certainly, for the foreseeable future, there are going to continue to be conventional cars on the road. So even if you have an accident between a conventional car and a highly automated vehicle, you’re still going to go through the claims process, and that claims process isn’t going to change very much," Stanley said.

"Although there may be fewer accidents in the pretty distant future, at least in the near term we’re going to be seeing a mixed fleet of vehicles with the opportunity for needing those claims folks handling the day-to-day fender benders and other accidents,” she said.

State Farm, the largest auto insurer in the U.S., has been actively following—and shaping—discussions about autonomous driving in Illinois and elsewhere.

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Ryan Denham is the digital content director for WGLT.