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Published 11/04/2008

News that Thatcham is championing ‘cars that can’t crash’ has got some people talking about a revolution in road safety. While the possibilities are significant, Ralph Savage finds many unanswered questions about how collision avoidance technology will be approached by insurers

A large TV audience will have witnessed the demonstrations at Thatcham’s test centre, featured on BBC Breakfast in February, as reporters gritted their teeth while deliberately trying to crash into an inflatable car. The next generation anti-collision technologies on show included three recent releases: Mercedes’ distronic plus; Honda’s collision mitigation braking system and Volvo’s city safety. Each has its own specific purpose (see box) – for example, the Mercedes and Honda technologies are designed to maintain safe distances from other vehicles while driving, or alert drivers to potential danger, while the Volvo system will intervene in low speed impact situations. This means it can potentially avoid accidents completely if they occur below 10mph – a significant achievement when you consider that 75% of crashes occur at speeds under 20mph.

Insurers, manufacturers and road safety campaigners are all agreed that it is great that new solutions are becoming available and, in particular, the fact that City Safety is being fitted as standard on Volvo’s XC-60 in November this year. But what this means for insurers in terms of how they will rate vehicles fitted with such technology is unclear. Thatcham’s research manager, Matthew Avery, is convinced it can go a long way to reducing claims, particularly whiplash from low speed impacts. “Volvo’s City Safety is definitely a system in which the insurers are interested. We have been contacted a lot about it,” he says.

“They realise it could have a big impact on real claims – in other words, reduction of whiplash injuries and reduction of third and first-party claims – because people just aren’t crashing so much. Regardless of premiums, there will be a theoretical reduction in payouts.”

Going it alone

Norwich Union’s motor underwriting strategy manager Nigel Bartram is happy to raise the insurer’s flag regarding collision avoidance technology.

“We believe it will reduce low speed accidental damage claims. On that basis we are seriously considering taking it into account in the rating of the vehicle,” says Mr Bartram.

He adds that NU is so keen it feels no need to wait for the insurers’ Group Rating Panel to decide whether or not collision avoidance systems should be an industry-wide rating factor. “If they decide to take it into account in the group rating we will go with it. If they decide not to, then we are going to seriously consider – particularly the City Safety system – making some adjustments ourselves.”

He continues: “We want to give the customer the most competitive price. If we are certain these systems are going to create fewer claims we want to put our money where our mouth is and act first to encourage people to buy them. The only trouble is, there’s not too many on the market at the moment.”

Other insurers are more cautious. Royal Bank of Scotland Insurance’s director of motor underwriting, Andrew Goldby, says: “Ultimately, insurance is about matching the premium to the risk posed by the policyholder and their vehicle. When new systems to improve driver safety are introduced, insurers estimate the likely impact they will have on claims. If few claims are reported, insurers will reassess the risk and reduce the premiums charged accordingly. Systems like this may cut the number and size of claims, but if this results in drivers’ safety awareness decreasing, the benefit could be reduced.”

Mark Underford, assistant technical manager at Groupama Insurances, agrees, saying underwriters remain cautious about making savings predictions ahead of substantive evidence that these are actually being realised. “Pricing is based upon historical data, not predictions about what might happen in the future,” he says. “As such, due to the very recent introduction of this technology, we have not yet taken any specific action to discount premium rating where vehicles are fitted with such devices.”

Cost cutting potential

As for Allianz Insurance, Jon Dye, its commercial motor manager, takes a holistic view, preferring to look at the cost-cutting potential of collision avoidance alongside the downsides of rising repair bills and damages inflation. “If Thatcham’s findings are true, and the potential is there to reduce low speed accidents, there are still many other inflationary factors on motor claims. These include credit hire charges, rising NHS costs, and increasing damages. The equation is not as simple as ‘here’s the new technology and it will result in a reduction of X%’.”

As Mr Dye alludes, one of the industry sectors anxious for more information on collision avoidance is that of the repair shops, worried that expensive technology fitted to vehicles will risk increasing their financial burden when accidents do happen. Mike Monaghan, chief executive of MVRA, says: “The more technology we put onto these vehicles, the greater the chance of massively increasing the cost of repair. There is one call to say that, if the vehicle is fitted with collision avoidance and vehicles are less accident-prone, the insurance industry should reduce premiums to reflect that. But almost the opposite is true when the vehicle is damaged; not all of these systems are affordable, and claims will become write-offs.”

Adam Clarke, director of underwriting at Fortis Insurance, says he too is looking for more data before the company builds collision avoidance systems into its own rating models, but agrees repair costs may counterbalance reduced accident frequency, by inflating reinstatement costs. “Clearly, if there is a rating benefit, we would look to take it and pass it onto customers in the form of lower insurance premiums.

“On face value, anything that reduces collisions is clearly a good thing. But we’ve got to understand that, where the technology is at the front of the vehicle, when it does crash what does that do to repair costs? Also, if the system is too good it may avoid vehicles crashing into cars in front, but potential rear impacts are not being dealt with.”

Legal liability

Another set of voices in the mix are those of defendant lawyers, anxious to find out more about the potential consequences that collision avoidance could have on liability.

Charlie Jones, partner at Weightmans and head of the motor special interest group at the Forum of Insurance Lawyers, says he would like to see the technology in action for himself. “I’m quite keen, from a SIG point of view, to have a trip to Thatcham to see what other developments there are in technological terms. I understand they like to show off what they do, and rightly so.”

Thatcham’s Mr Avery is not convinced that these new forms of technology could themselves be found responsible for accidents. “It’s important we understand the limitations of these systems. Drivers have to remain aware that, ultimately, they are responsible and they can’t rely on the technology saving them. In a legal framework, the manufacturers will not admit liability. They will say ‘this system was there to help you, if it didn’t deploy or didn’t save you because of the particular circumstances of that crash, it’s not our fault’. All of these systems only have the potential to help drivers avoid a crash and that’s where it stops.”

However, Browne Jacobson partner, Andrew Christon, is willing to stick his neck out on the liability front. “I wouldn’t be surprised if I stand alone on this. When you think back to airbags and their initial introduction, there was criticism of the product by drivers and passengers in various situations; either when they didn’t inflate or wrongly inflated and the occasional case where the airbag inflated and caused a driver error. In fairness, most of those problems were ironed out but we could end up with a similar position with a mechanism like this.

“There are bound to be occasions where the mechanism doesn’t work at all and doesn’t avoid the impact. There are also likely to be occasions where it activates and stops the car, but does so in a situation where it’s not safe to do so. Also, it may activate and prevent a prudent driver from taking avoiding action.”

Therefore, he predicts: “I can foresee – certainly in the early days – complaints and litigation against the car industry generally, either in wrongful activation or failure to activate. Drivers will also try and blame the system for making an accident worse or not avoiding the accident.”

Parking sensors

In the private car market, the only collision avoidance technology that has been effectively assessed to date and added to insurers’ premium rating models is that behind parking sensors. So case studies for these next generation technologies are rare.

Andy Price, practice leader for Zurich’s motor fleet business, says he expects his sector to be the early adopters of collision avoidance technology. “The early adopters in this are going to be the BMWs and the Mercedes of this world and they are quite common in the fleet car park. You will get some more forward-thinking fleet managers who will adopt this technology. We already have fleet managers specifying a certain Euro NCAP crash rating and the use of electronic stability control.”

One example in the fleet insurance market goes some way to proving that claims can be reduced without interventionist systems taking over – for professional drivers at least. Mitsui Sumitomo’s pilot of the Smartdrive system for the past 12 months has reduced claims experience in one 150-vehicle fleet by 56%, helping it secure a second deal with delivery firm Ocado for a fleet four times the size.

“Smartdrive is an in-cab camera system with a dual lense – one faces into the cab and the other out onto the road,” explains Mitsui motor fleet underwriter Marc Wanless. “Within the camera is a G-force sensor and, if the driver brakes hard or swerves to avoid something that exceeds the parameters within the sensor, it records the 15 seconds before and after an incident. So, when the driver returns to a depot, the system is updated and reviewed by the fleet managers.”

Big brother

Mr Wanless explains the driver’s actions within those 30 seconds can then be scrutinised: “They look at the surroundings – what was going on, is there something he missed, does the driver look tired? The full intention is to ask drivers if they would have acted differently and the hope is the driver will look at it and try and learn to behave differently. That’s where the claims performance should hope to improve.

“It’s not so much collision avoidance technology,” adds Mr Wanless. “But through feedback to the driver it should have an impact on reducing accidents. The benefit for us as an insurer is, if there’s an accident, we get to review the footage and when it comes to admissions of liability we can make that call very quickly. We can also use it to manage fraud claims as well.”

Mr Wanless’ comments point to a recurring theme in the current debate about collision avoidance technology. Thatcham is keen to point out that drivers must remain responsible for their vehicles and any risk compensation made due to the ‘comfort’ of such systems may be a threat to their potential. Will drivers simply loosen their grip on the wheel, the more safety systems they have to protect them?

Dr Will Murray, research director at Interactive Driving Systems, points out that drivers are rarely taught to use safety features like anti-lock braking correctly, so the only way to approach collision avoidance is to keep driver themselves as the primary consideration in any form of risk management. This applies whether you are insuring a single car or a fleet of trucks. “Vehicle technology is a good idea, but all the research and evidence suggests it’s not a silver bullet. You have to think about drivers and how they understand technology. People need to manage their journeys. It’s still the case that the best way to improve road safety is to get the train instead.”

Next generation anti-collision systems Low speed avoidance – example: Volvo City Safety This system uses low cost laser radar mounted behind the windscreen – and so out of harm’s way. It constantly monitors the road ahead. Once an object is within six metres, the system calculates whether the driver is reacting to avoid it. If not, the system will autonomously apply up to 50% of the braking power, enough to completely avoid contact at 10mph and mitigate the effects of a 20mph crash by 50%.

Adaptive cruise control – example: Mercedes Distronic Plus Links the common cruise control system with a radar fitted at the front of the vehicle. Essentially a comfort feature, ACC allows the driver to pre-set a speed in changing traffic conditions, with the vehicle autonomously maintaining a safe distance between itself and the vehicle it’s following, whatever the speed of the prevailing traffic.

Collision mitigation braking system – example: Honda CR-V Collision mitigation braking systems use the ACC radar to warn the driver visually and audibly that a potential collision is imminent. In some cases, the system will apply up to 70% of available braking power in an attempt to avoid or mitigate the crash. Many systems will pre-charge seat belt, airbag and brake systems to obtain optimum performance in the event of a collision.

Electronic stability control – widely available Uses the speed sensors on each wheel and the ability to brake individual wheels that are the basis of anti-lock brakes. ESC adds a control unit that monitors the steering wheel angle and vehicle rotation around the vehicle’s vertical axis. This unit then uses the steering and rotation information to detect when the vehicle is about to travel in a direction different from the one indicated by the steering wheel position. Then ESC automatically brakes the appropriate wheel to help the driver maintain control. In many cases engine power is also reduced.

Source: US Insurance Institute for Highway Safety/Thatcham.

This article has been reprinted with permission of the Claims Standards Council

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