Automated and Electric Vehicles Bill (First sitting)

Debate between Edward Argar and Craig Tracey

Committee Debate: 1st sitting: House of Commons
Tuesday 31st October 2017 Public Bill Committees

[Craig Tracey]

Q Would you envisage disputes going through the same channels as they currently do for disputes on liability?

Ben Howarth: In that kind of event, yes, I would.

[Edward Argar (Charnwood) (Con)]

Q I have a very quick question, following on, I think, from the answers that were given to the Minister’s question, in which you all said you anticipated that, if this goes to plan, it will see safer vehicles and therefore a reduction in accidents, leading to a reduction in premiums, which is clearly a positive for all those paying them. What assessment has been made, or what is your view of, any likely impact of that on the insurance market and industry? As I understand it, car and vehicle insurance premiums to a degree underwrite other insurance policies across the industry—that is the way it is structured. What impact do you think significant reductions in premiums would have in terms of disruption of the insurance market?

David Williams: Lots of work has been done on this by insurance companies and by market consultants, and they predict substantial reductions in the total premium pot. A couple of statistics—we think that 93% or 94% of accidents are caused by human error. I have driven in these machines; they are already much better drivers than most human beings. When we look at things like automated emergency braking systems—that is just one component of what will be the autonomous vehicle of the future—we know that they reduce accidents by 15% and injuries by 18%. So even if they cannot prevent the accident completely and absolutely, because they are braking better and faster there are fewer injuries.

We see a substantial impact. There will probably be a slight increase initially because you will have more expensive gadgets strapped around the periphery of vehicles, but once we see a higher proportion of these vehicles on the road, consultants predict a 50%-plus reduction in the total motor premium market. From our perspective, we are planning in that regard. The good thing is that it will not happen overnight, and therefore as we see motor premiums reduce we can move our staff and our capital on to other lines of business.