Claire Perry – under-secretary of state for transport recently launched three trials of driverless car technology, considering that driverless vehicles are now allowed on UK roads. With regards to driverless car insurance, AXA is performing trials in Bristol and Milton Keynes, while RSA in Greenwich. Driverless car technology is evolving rapidly, where America has already tested autonomous car technology. But the big question is how this will affect the car insurance sector? Will consumers be getting driverless car insurance?

Global telematics director Kenny Leitch says that the biggest strategic challenge is that these cars don’t crash. According to the RSA, cars that can drive themselves and don’t crash will pose less risks so insurance rules will have to be contoured to address that. Experts claim human error is the cause of 90% of car crashes so driverless cars should lower the number of claims and accidents. Another question car insurers need to answer is who will be responsible if any accident occurs?

Currently, a motor insurance policy is based on the driver of the vehicle, but the best solution for driverless vehicles is that the car manufacturer be responsible for the safety of the vehicle. The driverless car insurance policy will have to be rather comprehensive and protect both the owner and the manufacturer according to AXA underwriting managing director David Williams. He further says this is not necessarily bad news for the insurance sector and it’s a good thing to be involved, but they will also have to welcome new products.

Ryan Insurance Group chairman Tim Ryan said that both personal and motor insurance products would have to change extensively to cater to driverless vehicles. He further said that this may be the end for traditional motor insurance and also indicated that although driverless cars had the potential to significantly reduce risks, their cost would be geared towards a certain wealth category. Tim further said there would also be a need to develop specific software in the event the cars automated system was at fault in an accident. Developing this kind of new technology wouldn’t be cheap and would definitely result in inflated premiums, Tim added.

So there is no doubt that driverless vehicles will indirectly affect the broking community, but the opinions among industry experts are still unclear as to the level of impact they will have. With regards to the cultural shift, there will always be people who’d want to drive their own vehicles so the need for traditional insurance cover will always be present. But Park Insurance broker Marc Loud claims that car insurers will have to direct their attention towards other areas of the industry, and the future for insurance agents in the car industry was nearing an end.

He justified his statements by saying car malfunction will be the main cause of accident and not human error, which translates to a product liability issue. This will be one of the biggest reasons for the end of the motor insurance industry, Marc said.