Since the early 1960s, the insurance industry has been a major force behind the most significant advances in highway and vehicle safety, including electronic stability control requirements, seat belt use and automobile crash worthiness. Now, autonomous vehicle (AV) technologies offer an opportunity for us to reach another milestone in vehicle safety, moving beyond keeping people safe in a crash to avoiding the crash altogether.

Executive Summary

The liability and insurance implications of autonomous vehicles will evolve as they progress from Level 1 vehicles, under human control with some automated functions, to fully automated Level 4 vehicles, according to Munich Re America's John Willemsen, who suggests that Levels 1-3 will be the toughest to navigate from an insurance perspective, as underwriting tools and data are rebuilt.

AV technology offers tremendous potential to make driving safer, provide fuel economies and improve road efficiencies. Data from tests conducted by the Insurance Institute for Highway Safety (IIHS) show vehicle safety systems—the building blocks of fully autonomous vehicles—have been successful at reducing accidents. Savings related to economic costs (e.g., accident-related, fuel and productivity costs) vary widely, with estimates ranging from $200 billion to $1.9 trillion by 2025.

Most car manufacturers have announced various levels of autonomy in the next five to 10 years, with high-profile trials conducted by Mercedes-Benz, Audi and Tesla as well as high-tech companies such as Google and Delphi. However, projections vary for the time frame for complete integration of fully autonomous vehicles on U.S. roadways. An emerging technologies study from IIHS Automotive estimates that fully self-driving cars are anticipated to hit highways around 2030.

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