Can’t Touch This

The effect of evolving vehicle technologies on accident avoidance and claims workflow.

By Sunil Nayak

The automobile industry has come a long way since Ralph Nader penned Unsafe at Any Speed in 1965 and, arguably, ushered in the modern era of automotive safety. Nader criticized the industry for putting design and style ahead of consumer safety. A year later, Congress passed the National Traffic and Motor Vehicle Safety Act and the Highway Safety Act, the first comprehensive automobile safety legislation in U.S. history. Automakers responded with a range of standard safety features, including padded steering wheels, shoulder belts, safety glass, emergency flashers, and rear backup lights.

In terms of technology, those features now seem quaint and decidedly passive. They were certainly focused more on preventing injuries than avoiding accidents. But they set in motion an evolution that continues to this day, turning technological advances once reserved for premium vehicles and high-end option packages into standard features offered on the most basic entry-level cars. Today, it’s hard to find a car without accident avoidance features like anti-lock brakes, traction control, or vehicle-stability control. Even tire-pressure monitoring systems are becoming commonplace.

Given the rapid adoption of technological advances, it’s safe to posit that within the next five or so years, today’s luxury safety features will be tomorrow’s standard features. For example, we can reasonably expect to see front crash protection, adaptive cruise control, and parking assists become standard or at least affordable options. The 2015 Subaru Legacy already offers these safety technologies, along with curve-speed warning and blind spot protection, for around $3,000. That’s relatively inexpensive considering the level of sophistication.

Even with this speedy pace of evolution, it may be a decade or more before we realize the full benefit of these accident-avoidance technologies. The average vehicle on the road is around 11 years old, so we will have to wait until the majority of cars have this new technology before we can expect a significant dip in the rate of auto insurance claims. But we are on the way.

Moving From Passive to Active

Another big step in shifting from passive to active accident avoidance is the widespread adoption of the connected car. We’re well on our way to cars being part of the Internet of Things (IoT), which refers to the ability of everyday objects to connect to the Internet and to send and receive data, according to the Federal Trade Commission. As a result, telematics and teleoperations are turning cars into intelligent devices. Telematics such as General Motors’ OnStar and Toyota’s Safety Connect already are widely in use, and wider adoption of technologies like AT&T Drive and Apple CarPlay is on the horizon.

For connected cars to have a genuine impact on claims workflow, we will need to understand how to enable smart communication between vehicles and infrastructures—vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I), respectively. Then, much of the aforementioned vehicle technology will move from passive to active. In other words, driver intervention won’t be needed to prevent a car from swerving into an occupied lane or rear-ending another vehicle. The cars will “talk” to each other and react on autopilot.

The University of Michigan Transportation Research Institute (UMTRI) and the U.S. Department of Transportation have partnered to conduct the world’s largest real-world test of dedicated short-range communication-based connected vehicle communication technology. This pilot included approximately 3,000 vehicles in operation on public streets in Ann Arbor, Mich., between August 2012 and 2013. It was designed to determine how well vehicle wireless communication technology works in the real world. According to the UMTRI safety pilot website, it represented a “scaled-down version of a future in which all vehicles will be connected.”

Technologies That Will Accelerate Adoption

For V2V and V2I technologies to have a significant impact, the number of cars with these capabilities will have to reach critical mass. According to Auto Insurance Report, there are about 250 million vehicles on America’s roads. With an average age per car of 11 years and only 15 million new car sales a year, adoption won’t happen overnight, but it could be accelerated. For example, vehicle awareness devices, such as smartphones, and aftermarket devices like those developed for usage-based insurance (UBI) that utilize the onboard diagnostic port, may expedite the adoption of V2V and V2I communications. In addition, government mandates also will make a huge difference as they have with many other technological safety advances from padded dashboards and three-point seat belts to air bags.

As our vehicles become more connected, insurance claims handling will evolve within the same 10- to 15-year time frame. Instead of being routed through claims professionals who must coordinate individual activities, the claim can be dispersed to all parties involved in a parallel process. The decision to repair or declare a total loss will be expedited, saving time and money.

The Driverless Car

The vast majority of automobile accidents are the result of human error in recognition, decision-making, or performance, according to the National Highway Traffic Safety Administration’s National Motor Vehicle Crash Causation Survey. It stands to reason, then, that taking humans out of the equation is the accident-avoidance holy grail. But reaching that utopian state where cars are truly autonomous will require near-universal adoption of all the passive and active technologies available now, plus advanced technologies that are still in various states of experimentation or conception. It also will require the nationwide passage of laws legalizing driverless cars; right now, they are illegal on most public roads. Still, we are much closer to realizing this than we were 50 years ago when three-point seat belts were the safety sine qua non.

What Happens Next Is Up to Us

Evolution is slow, but the pace of transforming our vehicles into smart, connected communications devices is accelerating. The insurance and collision repair industries need to prepare for the changes ahead. The promise of advanced technologies to prevent accidents is true. And when accidents do happen, we can streamline the repair process or expedite the declaration of total loss.

As the price of these advanced technologies comes down, consumers will embrace accident-avoidance features. They may adopt UBI and its related technologies, too, as it becomes more widely available and consumers see the impact on their insurance premiums. What remains to be seen is the impact of evolving vehicle technologies on repairable claims. Will safer drivers mean fewer claims? Will the cost of repairing smart cars be prohibitive, negating premium savings? Will expensive repairs result in more total losses? In the short term, the answer to all these questions is probably “yes.” But slow as it is, evolution also is relentless, and every challenge brings an opportunity to create a solution.

Sunil Nayak is director, product management, for Mitchell International, www.mitchell.com. He has been a CLM Fellow since 2014.

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