Most major automakers have pledged to adopt crash avoidance technologies in all of their vehicles by 2022. How will this and other similar safety innovations impact the insurance industry?
A group of the world’s largest automakers has committed to placing more emphasis on Automatic Emergency Braking (AEB) systems and other high-tech safety features in the near future. These kinds of innovative technologies are becoming more and more common in new vehicles, according to Auto Alliance, so the establishment of some sort of industry baseline was not only necessary, but also long overdue.
While the agreement itself was somewhat expected, the impact of the pledge will be huge: according to the Insurance Institute for Highway Safety (IIHS), 20 top car companies (which constitute 99% of the U.S. market) will “make automatic emergency braking a standard feature on virtually all new cars no later than the National Highway Traffic Safety Administration’s (NHTSA) 2022 reporting year, which begins Sept. 1, 2022.”
The pledge’s undersigned companies are Audi, BMW, FCA US LLC, Ford, General Motors, Honda, Hyundai, Jaguar Land Rover, Kia, Maserati, Mazda, Mercedes-Benz, Mitsubishi Motors, Nissan, Porsche, Subaru, Tesla Motors Inc., Toyota, Volkswagen, and Volvo Car USA. This represents a huge leap from the prior commitments of only 10 automakers in September 2015, when the NHTSA first issued a challenge for industry-wide adoption of this forward-thinking safety technology.
"We're getting these safety systems into vehicles much faster than what would have been otherwise possible," said Dr. Mark Rosekind, NHTSA Administrator. "A commitment of this magnitude is unprecedented, and it will bring more safety to more Americans sooner.”
New Levels of Safety
These new systems are so important because of the unparalleled level of driver and passenger safety they’re able to provide. According to the NHTSA stats, human error is responsible for 94% of traffic crashes, according to AutoNews — removing or minimizing the possibility for these errors to occur could have a tremendous impact on roadway safety. AEB systems, for instance, reduce the likelihood of rear end collisions by up to 40%, as Property Casualty 360 explains.
“With roadway fatalities on the rise, the commitment made today has the potential to save more lives than almost anything else we can accomplish in the next six years," Deborah A.P. Hersman, president and CEO of the National Safety Council, said of the commitment.
What’s more, making one safety feature standard will encourage innovation in other areas, pushing car companies to offer more and more for consumers looking for not only the safest drive, but the newest bells and whistles, as well.
Effects on Insurance
Increased levels of automotive safety will impact more than just the NHTSA statistics. New road conditions will be important for the automotive insurance industry, as providers will have to adjust the policies they offer — but adjustment isn’t necessarily a bad thing.
IIHS Board Chairman and CEO of American Family Insurance, Jack Salzwedel, is bullish on the new opportunities the tech presents. "Deploying AEB on a wide scale will allow us to further evaluate the technology's effectiveness and its impact on insurance losses,” says Salzwedel, “so that more insurers can explore offering discounts or lower premiums to consumers who choose AEB-equipped vehicles."
And while the tech mostly presents new opportunities for safety, it can also provide new areas of risk. Like all forms of web-connected tech, automated automobiles are threatened by cyber-attacks, according to Property Casualty 360.
New insurance products can help to assuage consumer concern and alleviate the issues that come along with this risk. And if one standardized aspect of the driver experience can be automated, that means we’re moving closer and closer to fully automated, self-driving cars, an eventuality which will provide the insurance world with a whole realm of new opportunities.
No matter what, the way in which people drive is going to change significantly in the near future. Luckily for the insurance industry, agents can take advantage of innovative digital tools and sales strategies to keep pace with each exciting new development.
(Main image credit: Nabeel Syed/Unsplash)