Who’s in the Driver’s Seat? Risk Management Updates for the Autonomous Vehicle Industry

A 2022 RIMS session looked at new regulations that impact the autonomous vehicle industry.
By: | April 12, 2022

Though they’re not in full use yet, fully autonomous vehicles are sure to disrupt the insurance industry. 

Underwriters have years of historical loss data and feel quite comfortable with the risks personal and commercial auto lines face.

But autonomous vehicles pose a whole new challenge. One that we may need to be ready for sooner rather than later.  

During the session “Understanding Autonomous Vehicle Risk and Insurance” at the 2022 RIMS annual conference in San Francisco, presenters Lynn Haley Pilarski, senior manager, risk management and insurance at General Motors Company, and Katherine Henry, partner at the law firm Bradley Arant Boult Cummings LLP, detailed what risk managers need to consider when it comes to autonomous vehicles. 

“Autonomous vehicles will become more prevalent, including in commercial use, raising insurance questions for risk managers. This presentation gives them the opportunity to understand the newly emerging insurance market,” Henry said in an email ahead of the session. 

New Federal Regulations Pave the Way for Autonomous Vehicles

During the session, Henry and Pilarski highlighted the National Highway Traffic Safety Administration’s Occupant Protection for Vehicles With Automated Driving Systems rule.  

“Autonomous vehicles are real. New federal regulations have cleared the way for accelerated testing and ultimate acceptance of AVs,” Henry said 

The rule establishes safety standards for autonomous vehicles with conventional, forward-facing front seating systems and vehicles meant for solely carrying goods and carrying no occupants.

The administration deemed further study was needed to establish rules for autonomous vehicles with other configurations. 

The rule does include “dual-mode” autonomous vehicles, or those designed for both driverless and manual use in its rule.

These standards will likely serve as the bedrock for any future legislation or regulations over the autonomous vehicle industry. 

What’s a Risk Manager to Do?

Autonomous vehicles are just one of many emerging technologies that are disrupting insurance markets.

Companies developing these technologies need to make the risks clear as they enter into talks with underwriters during the early stages. 

“Autonomous vehicles can be viewed as a disrupter to the traditional auto and insurance markets,” Henry said. 

As the technology develops, risk managers may soon be considering adding autonomous or semi-autonomous vehicles to their fleets.

Though that may be years off, it would be prudent for risk managers to start paying attention to regulatory actions.

“Risk managers need to understand how the deployment of AVs will interplay with existing insurance structures (policy issuance, coverage and claim handling), state licensing and federal safety standards, including NHTSA’s March 10 first-ever ‘final rule’ establishing Federal Safety Standards for AVs,” Henry said. &

Courtney DuChene is a freelance journalist based in Philadelphia. She can be reached at [email protected].

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