RUCKERSVILLE, Va. (Reuters) – Automakers are accelerating the roll-out of a technology that is designed to prevent the occurrence of the crash, but the insurer and a lot of a caution flag, when the consumer looked at the discounts available for the purchase of a collision-avoiding brakes, automatic, cruise control.
Philip Floyd, a senior engineering technician for the Insurance Institute for Highway Safety (IIHS), shows a head-on collision to avoid a test at one end of 2018 Tesla Model 3 is by the IIHS-HLDI and Vehicle Research Center in Ruckersville, Virginia, USA, on July 22, 2019. Photo of July 22, 2019. (REUTERS photo/Amanda Voisard
The global market for advanced driver assistance systems, which is well-known in the industry as well as ADAS is expected to increase to more than $67 billion a year by 2025, growing by more than 10 per cent a year. A group of about 20 car manufacturers have agreed to your outfit for almost any new vehicle with a forward collision warning system and city speed, the automatic emergency braking in the year 2020.
Government mandates to install the technology, for example, to avoid a collision and automatic braking systems are the driving force of the market, as well as the promise of profit for those higher-margin vehicles.
“Everyone who has a car with advanced safety solutions is not going to have to go back home,” Kevin Clark, chief executive, automotive technology-supplier of Aptiv PLC, told Reuters. The cost of the advanced safety features – automatic braking, lane-keeping and automatic cruise control can be relatively low in the automobile, in the range of $500 to $1,000 per vehicle, Clark said.
“The (manufacturer’s), there may be a price the consumer will pay for it,” he said.
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Aptiv is expected to post more than $4 billion in new ADAS business this year. “We have gone from five customers, of which just a few years ago, and I think that we are in the north, 20 in a couple of years from now,” Clark said.
In the insurance industry, the perspective is a little different.
A personal auto insurance policy, while traditionally a low-margin business, it offers the most amount of cash on the insurance, it will generate more than $ 244 billion by 2018, with direct written premiums in the United States alone, data from the National Association of Insurance Commissioners showed. Motor insurance is seen as a way for insurance companies to cross-sell other, more profitable, products to their customers.
According to Swiss Re AG, the world’s largest vehicle structure, and the mapping business HERE, and ADAS have the potential to reduce accident frequency by up to 25 per cent of the cut of the worldwide insurance premiums for the full ADAS car is equipped with $20 billion in 2020.
But in the US, insurers have indicated that they do not have enough data to validate the auto industry’s promises of safety and security, the benefits of automated driving systems.
They cite the car manufacturers ‘ reluctance to provide detailed information on the models being sold with these features, it is a lack of consistent standards, and drivers are unpredictable, use of the systems as well as a higher repair cost.
“We’re not going to go on at the same time, and it’s making all kinds of fake discounts for the purpose of marketing at this point. We just want to make sure that the price is a reflection of the risk that it entails,” said Steve Armstrong, one of the vice-president of the Allstate Corp. (a) awards section, one of the nation’s largest insurance companies.
Shantelle Thomas, a vice president of Allstate’s pricing department, said the insurance rates will reflect the benefits and costs of a modern vehicle technology over the next five years, but it will not necessarily be presented as a discount.
The sentiment was echoed by other insurance companies.
“We’re stuck in a murky in-between,” said Jennifer of california. John’s national auto claims leader at Westfield Insurance. “ADAS is shown to offer real advantages, but it really isn’t a large degree of commonality in terms of what’s out there.”
Insurers have pointed out, the higher the repair cost as a risk. The sensors and the camera’s auto-driving systems are usually installed in a car’s bumper or window. Investigations by the AAA, it has been demonstrated in repair costs for even minor collisions can be doubled, if such a sensor is defective.
“There is no such thing as a $300 bumper, and more. It’s closer to $1,500 in repair costs today,” said Richard Lavey, executive vice-president at The Hanover Insurance Group.
State Farm, in a statement said that they did not offer discounts, in particular for advanced driver assistance systems, and that future cuts would have to be formed by a variety of factors, including safety, regulatory, underwriting, liability, and cost to repair.
GEICO did not respond to requests for comment.
DATA IN THE DESERT
With new automated driving features that are being released on a rolling basis, and the insurers said that it is very difficult to keep track of.
A Forward collision warning system with automatic braking, and has been found to be one of the greatest safety benefits between the different driver assistance systems. The Insurance Institute for Highway Safety concluded in a recent study conducted by the automatic braking, reduce front-to-rear crashes resulting in injury by 56%.
But, most of the ADAS functions will continue to be sold as an optional equipment, which makes it impossible for insurance companies to confirm that this has on a particular car. Insurance companies are reluctant to have the trust and confidence of the car buyers in order to correctly identify the technology in their vehicles, on board the ship.
Advanced safety features will not only vary in terms of performance, and descriptions of the different manufacturers, but even among models by the same manufacturer, according to a study by the IIHS, and its BRITISH equivalent, the Thatcham Research, which is conduct road tests to evaluate the safety and technical performance.
“The only way you’ll be able to adequately price was due to the acquisition of more data in order to understand what a car is and whether or not it makes a difference,” says Matthew Avery, Thatcham’s director of research.
That is, the data is not sufficiently supplied by the manufacturers, who often cite their own competitive reasons, said Tom Charles, the general counsel of the National Association of mutual insurance companies, whose members insure more than 170 million of the nation’s auto policy holders.
Car manufacturers and insurance companies, have said that they have to deal with the problems associated with the data. General Motors Co. has a team that is working on ADAS and insurance, according to Barry Engle, the head of GM’s North American operations.
Engle said he expects to have better information, insurance companies would respond positively. “To the extent that they are, collectively, that we need to do a better job of communicating with each other,” he said.
Swiss Re is one of the important efforts in the development of a global ADAS-risk rating, and provide a mechanism for manufacturers to provide information on Swiss Re, which, in turn, recommend the discounts on auto insurance.
“If we are to say that their cars are safer, insurance companies are more inclined to believe that we are a part of the risk as a reinsurer for a consumer-facing auto policy writers, said, S. Bongers, Swiss Re’s head of products and technology.
Bongers is the opinion of a decrease in the frequency of accidents and their severity, it will eventually compensate for the higher repair costs. He, however, said the lower premiums would result in a temporary cash-flow problems in the insurance industry over the past decade or so.
Swiss Re has teamed up with Germany’s BMW is in talks with several car manufacturers to develop a complete system.
Report by Tina Bellon; Additional reporting and editing by Joe White; Editing by Edward Tobin