How brokers can prepare for commercial fleets

Driverless technology will have a huge impact on commercial fleets. How can brokers best prepare for that?

David Williams, Technical Director at AXA Insurance in Guest blog

20 January 2020

Much of the talk around driverless technology focuses on private cars but the adoption of autonomous vehicles might come sooner – and have a deeper impact – in commercial fleets. With that in mind, brokers offering cover to fleets need to be aware of the threats and opportunities this evolution may bring.

The UK haulage industry is struggling to recruit long-distance drivers: hours are long, conditions can be tough, and workers don’t like sleeping away from home. Imagine a haulier with a small fleet – say, ten vehicles – with three drivers on the cusp of retirement. Autonomous trucks may be the answer to this problem.

Driverless trucks are already operating in Australian and Swedish mines. Platooning has been tested on roads in Sweden, Spain, Japan and the US, with connected trucks driving close together at a steady pace. Level 4 driverless vehicles, which are highly autonomous and can operate in pre-mapped areas, could become commercially available in 2021 and take to UK motorways and carriageways the same year. AXA XL has even been involved in a UK Innovate-backed initiative called DRIVEN that looks to have a fleet of fully autonomous cars completing trials on roads between London and Oxford this year.

Brokers should know there is insurance available to the firms testing these vehicles, and later to those using them commercially.

The 2015 Code of Practice for testing makes clear that “anyone conducting tests of automated vehicles on public roads or in other public places must hold appropriate insurance”. It is the job of brokers to ensure customers are aware of this requirement. They also need to make sure their insurer partners are informed ahead of any trials.

Specific policies are already available to cover the testing of autonomous vehicles; AXA XL was among the first companies to offer solutions for such trials. Besides, insurers might send risk management experts to discuss testing procedures and give recommendations on safety. Insurers and brokers should also urge customers to keep detailed records of the trials, as data and audit trails are essential in case anything doesn’t function as expected.

Once driverless trucks are tested and in operation, there are two key areas to consider: those usually covered by a commercial motor policy, but also those usually arising under a ‘general’ public and product liability policy. Brokers should seek to get both elements from the same insurer, otherwise some claims might end up in a game of hot potato, with each insurer suggesting the other carrier’s policy is responsible.

Whilst this technology might seem way off in the future, brokers should make sure they are up to speed as soon as possible. With substantial benefits available, firms operating commercial fleets are likely to want to take advantage of driverless vehicles sooner rather than later.

Savings and safety

According to research we’ve commissioned, the UK haulage industry could save £33.6bn over ten years by using autonomous trucks: they’d need a smaller workforce; vehicles would consume less fuel; and if driverless HGVs prove less accident-prone, insurance premiums could be cut.

Self-driving vehicles will change the nature of motor claims. In theory, claims will be simpler because these computers on wheels are equipped with a multitude of sensors (radar, dashcam, black box). In the event of an accident, all that data will help determine what happened.

That said, establishing liability might prove more difficult. The motor insurer will have to deal with the claim promptly, before turning to the manufacturer, the software provider or the companies that serviced the vehicle to see if they are liable. As connected vehicles communicate with road infrastructure, other parties may come into the equation.

Cyber risk is obviously a concern as hackers could look to target driverless trucks. However, these systems are being designed with cyber security as a primary focus. They are programmed to avoid collisions and preserve life.

Overall, road safety will be improved because this technology removes human error, which at the moment accounts for the vast majority of accidents. For hauliers, it could end the unappealing prospect of night-time rides and driver fatigue.

The transport industry has much to benefit from those safety improvements and financial savings. Brokers don’t need to wait around to join the platooning convoy; they can find out more now and be a driving force in automating commercial fleets.

This article was first published in Insurance Age.