In Focus: Automotive Technology

March 2019

New technology in the automotive industry, like connected cars and blockchain, have been on our radar for a while, but with the fast pace of change in the industry, we have found that there are exciting new developments being forecast all the time. In this blog, we look at the new features being developed in 2019 that are set to change the way that drivers interact with their cars.
Smart connected cars
Connected cars have been around for a while, but this technology is expected to become even more widespread and advanced in 2019. One car manufacturer leading the way is Nissan, who announced that this year will see the expansion of over-the-air updates (via the Cloud) across its models. They will also be focusing their efforts on integrating customers’ personal smart devices with their cars. Vice President of Product Planning at Nissan, Ponz Pandikuthura, cited features such as real-time traffic updates, voice recognition and the ability to locate your car remotely as ‘must-have’ features cars in the next few years.(1)
Predictive cars
The data collected by connected cars provides new opportunities for car manufacturers to create new car features, one of which is the ability to become a predictor. Predictive maintenance will give cars the intelligence to identify issues before they occur using sensors on the vehicle, in conjunction with data from warranty repairs.

One feature that is likely to be the most useful to drivers is predictive collision avoidance systems. Using a combination of advanced sensors, car-to-car connectivity and predictive analytics technology, it is hoped that this new technology will help to drastically reduce the number of car accidents.
IoT and Blockchain
Vehicle manufacturer Volkswagen and IoT-driven blockchain platform IOTA announced last year that 2019 would see the launch of their first blockchain-enabled cars.(2) The Digital CarPass vehicle is designed to capture more accurate and reliable data from vehicles using blockchain, with the aim of using this data to improve vehicle efficiency and transparency. Volkswagen’s Head of Blockchain, Benjamin Sinram, also announced a project in development that focuses on documenting the software code embedded in certain cars, which would be able to prove the current version of software the car is running if it was involved in an accident.
Many automotive manufacturers now have their own apps, which allow drivers to see useful information about their cars. Electric car users can view data such as the remaining time left for their vehicle to charge and the time until the battery runs flat. However, it looks like apps are about to take the next step forward and give you the ability to lock and unlock your car from your smartphone.

Last year the Car Connectivity Consortium (CCC), whose members include Audi, BMW, Hyundai and Volkswagen, published the first specifications for a digital key release, which looked at how tech companies could make using smartphones to unlock cars, start engines and share access with another driver, the norm.(3)
The effect on automotive insurance
With the Automated and Electric Vehicles Act 2018, we are already preparing for some big changes coming from automation. The Government has put into place legislation that effectively places legal responsibility for road traffic accidents at the feet of the insurer. Consequently, no matter whether an accident is caused by an inattentive driver or a bug in the car’s software, the victim will not need to prove which was at fault. Their claim will be against the insurer directly, providing a clear legal path to liability.

This, allied to the introduction of new technologies will undoubtedly have a significant effect on automotive insurers. On one hand there would be an expectation of lower claims frequency and severity, although potentially offset to some extent by a higher average repair cost due to more radars, sensors and other driver aids increasing the cost of crash repair parts. Insurers may also have to prepare for the shift in liability from the driver to the vehicle in the event of an accident. This could also mean a revision to pricing and underwriting tables whereby driver information, such as their age and claims history, might not carry such prominence in risk profiling as they have in the past. Insurance premiums being more focused on technological variables, such as the level of software the car is running could become commonplace.