A changing landscape of risk and opportunity
Smart cars with automatic sensor driving on metropolis with wireless connection by Suwin via Shutterstock
Autonomous vehicles hold the promise of one day practically eliminating automobile accidents in this country, and with them, the risk of serious injury and death, together with property damage. While we wait, there’s some consideration that the number of accidents might initially go up during the roll-out. Others warn of possible mass casualties from automotive cyberattacks.
First, the good news. While the timetable for autonomous vehicles (AV) and ride-sharing services keeps getting pushed back, insurance opportunities abound now. Digital Insurance magazine’s recent Technology Vision survey reports that 69% of insurance executives were optimistic that AVs would bring new auto premiums to the industry by 2025. In fact, they expect premiums will increase in the three key policy areas of cybersecurity, product liability for sensors and algorithms, and insuring for infrastructure failures.
While cars will eventually be much safer with AV technology, a recent study shows some interim features, such as adaptive cruise control, are actually encouraging more dangerous behavior by drivers, lulled into a false sense of security. Distracted driving is increasing as well. Gone are the days of reaching for a single knob that turns on the radio and raises the volume in one motion. The Digital Insurance survey also noted the expectation that as cars become fully automated, vehicle manufacturers will become a bigger share of the auto insurance market through product liability coverage.
Now, the bad news. California-based Consumer Watchdog is warning that all these internet connected vehicles will be vulnerable to a mass cyberattack that could lead to casualties rivaling the 911 terrorist attacks or worse. The group has issued a report urging automakers to install “kill switches” that would allow vehicles to quickly and easily be disconnected from the internet.
“Millions of cars on the internet running the same software means a single exploit can affect millions of vehicles simultaneously. A hacker with only modest resources could launch a massive attack against our automotive infrastructure, potentially causing thousands of fatalities and disrupting our most critical form of transportation,” the group warns.
The report says two-thirds of new cars by 2022 will have online connections to the cars’ safety-critical system, putting them at risk of deadly hacks.
LMA Newsletter of 8-26-19
