Insurance Offers a 'Seatbelt' for Autonomous Driving Systems
3 April 2025 · Uncategorized ·
Source: · https://www.cnr.cn/tech/mxhrdt/20241017/t20241017_526942761.shtml
Recently, intelligent connected vehicles have been rapidly advancing. Cities like Beijing, Shanghai, Hangzhou, and Shenzhen announced expansions of autonomous driving test zones this year in order to pave the way for large-scale applications of smart cars. As these vehicles transition from science fiction into everyday life, some people marvel at their convenience while others worry about safety: Who is responsible if an accident occurs? And who pays insurance on driverless cars?
The government, insurers, car manufacturers, and operators are working together to build a comprehensive insurance service system tailored specifically for smart connected vehicles. The demand for security measures has become urgent.
Are the autonomous driving functions found in new energy vehicles similar to those seen in intelligent networked automobiles? Industry insiders explain that according to standards of automated driving levels (ADL), there are six grades from L0 through L5, with L3 being a significant 'watershed'. At this level and above, responsibility for target detection and response shifts from human drivers to the system. Currently, China's ADL 3 conditional autonomous vehicles and ADL4 highly autonomous ones have moved into road testing phases.
In recent years, favorable policies have been introduced in rapid succession to support smart connected cars. In November last year, four departments including MIIT (Ministry of Industry and Information Technology) jointly issued a notice on conducting pilot programs for intelligent networked vehicle access and road use, providing policy backing for ADL3-4 vehicles.
In June this year, the same four ministries announced that nine car manufacturers along with their respective users would conduct pilots in seven cities including Beijing, Shanghai, Guangzhou. The products cover passenger cars, buses, trucks among others.
The MIIT also released a notice on July 1st about 'vehicle-road-cloud integration' application pilot city lists to explore the construction of low-latency and high-reliability network control infrastructure for promoting widespread use of autonomous driving technology with richer scenarios and data support. According to statistics from the MIIT, by mid-year there were already seventeen national intelligent connected vehicle test zones established across China along with seven leading areas in vehicular networking; sixteen 'smart city-smart transportation' pilot cities had been set up as well.
With advancements in autonomous driving technology shifting control over vehicles away from humans towards automated systems, new risks and insurance demands have emerged. A recent white paper by Taiping Reinsurance (China) Co., Ltd under China太平and the Asia-Pacific Reinsurance Research Center highlights that both hardware components like chips, algorithms, sensors as well as overall system architecture safety are key risk sources for functional security.
Moreover, when vehicles communicate with external networks via车联网(V2X), they generate large amounts of data interaction which opens up cybersecurity and privacy risks.
'Risk protection is a fundamental requirement in the transportation industry,' said Li Lison from Taiping Re (China). 'Changes at the industrial end will eventually impact insurance providers; thus, advancements in smart connected vehicles necessitate new requirements for automotive insurance.'
Product development faces challenges
Insurance coverage has become an important research topic regarding pilot programs of intelligent networked vehicle access and road use. In June this year, Beijing solicited public opinions on its draft Autonomous Driving Vehicle Regulations which stipulate that entities applying to conduct innovative activities with autonomous driving vehicles must purchase compulsory traffic accident liability insurance (CTALI), carrier's responsibility insurance, passenger accidental injury insurance as well as commercial third-party liability auto-insurance or open a bank guarantee for road accidents.
The regulations also encourage insurers and car manufacturers to collaborate in developing specialized products tailored towards the unique characteristics of self-driving cars. However, current market offerings are primarily designed with traditional vehicles in mind lacking dedicated coverage options suitable for potential incidents during testing phases of smart connected automobiles leading to numerous challenges when it comes to product development and operation.
Firstly, responsibility determination is difficult under existing legal frameworks where accident liability typically hinges on driver behavior but becomes more complex once autonomous driving systems take over. This complicates investigations raising costs while prolonging resolution times.
Secondly, the shift in liable parties poses another challenge as some pilots specify that manufacturers or operators assume primary responsibility when no human drivers are present necessitating changes to insurance policies and product design accordingly.
Lastly, designing appropriate products is challenging due to limited data on high-level autonomous driving vehicles making risk assessment difficult. Although these cars feature advanced sensors generating substantial test datasets their varied formats complicate analysis while constantly evolving algorithms further hinder stable underwriting practices.
Currently available insurances mainly cover traditional risks like collisions or personal injuries but fail to address emerging cybersecurity threats leaving certain scenarios unprotected.
Despite progress in policy and regulation, China's smart connected vehicle insurance sector remains nascent with regional differences posing potential issues for cross-regional operations necessitating continuous updates from regulators based on technological advancements.
Innovative development needs steady advancement
'Autonomous driving technology is still evolving rapidly,' Li Lison noted adding that legal environments will also change accordingly over time requiring adjustments to insurance policies.
Internationally, Tesla in the US integrates auto-insurance into its autonomous vehicle deployment cycle using driver behavior and car performance data for risk reduction. Japan offers commercial-specific insurances targeting ADL4 systems where providers pay monthly premiums leaving hardware suppliers exempt from direct liability; analysis post-accident determines responsibility based on software or hardware faults.
Taiping Re (China) has been researching relevant policies since 2019 developing specialized pricing models and innovative products to cater for the unique needs of smart connected vehicles. Their dynamic model architecture allows automatic updates as autonomous driving levels increase adjusting factor weights accordingly until human-related factors are phased out entirely at higher ADLs.
In China, PICC Group has also initiated development work on dedicated insurance terms since 2022 providing risk coverage according to local requirements in test zones accumulating valuable data and experience for future product design. They collaborate with major car manufacturers conducting studies into the effectiveness of autonomous functions like automatic parking or emergency braking systems.
'Currently, China's smart connected vehicles are still transitioning from testing phases onto roads,' said Cai Zhiwei Vice President at PICC Group adding that low claims rates won't impact business operations in short term but companies must stay ahead by studying industry trends and preparing innovative products addressing human-machine responsibility issues to meet diverse consumer needs.
'Given the rapid technological evolution of smart connected vehicles spanning multiple sectors, insurers alone cannot provide comprehensive services,' Li Weimin General Manager at Dinhua Insurance's Auto Department noted emphasizing cross-industry collaboration as key for building robust insurance systems. Insurers need cooperation with re-insurance companies, car manufacturers and operators to leverage complementary strengths.
The government, insurers, car manufacturers, and operators are working together to build a comprehensive insurance service system tailored specifically for smart connected vehicles. The demand for security measures has become urgent.
Are the autonomous driving functions found in new energy vehicles similar to those seen in intelligent networked automobiles? Industry insiders explain that according to standards of automated driving levels (ADL), there are six grades from L0 through L5, with L3 being a significant 'watershed'. At this level and above, responsibility for target detection and response shifts from human drivers to the system. Currently, China's ADL 3 conditional autonomous vehicles and ADL4 highly autonomous ones have moved into road testing phases.
In recent years, favorable policies have been introduced in rapid succession to support smart connected cars. In November last year, four departments including MIIT (Ministry of Industry and Information Technology) jointly issued a notice on conducting pilot programs for intelligent networked vehicle access and road use, providing policy backing for ADL3-4 vehicles.
In June this year, the same four ministries announced that nine car manufacturers along with their respective users would conduct pilots in seven cities including Beijing, Shanghai, Guangzhou. The products cover passenger cars, buses, trucks among others.
The MIIT also released a notice on July 1st about 'vehicle-road-cloud integration' application pilot city lists to explore the construction of low-latency and high-reliability network control infrastructure for promoting widespread use of autonomous driving technology with richer scenarios and data support. According to statistics from the MIIT, by mid-year there were already seventeen national intelligent connected vehicle test zones established across China along with seven leading areas in vehicular networking; sixteen 'smart city-smart transportation' pilot cities had been set up as well.
With advancements in autonomous driving technology shifting control over vehicles away from humans towards automated systems, new risks and insurance demands have emerged. A recent white paper by Taiping Reinsurance (China) Co., Ltd under China太平and the Asia-Pacific Reinsurance Research Center highlights that both hardware components like chips, algorithms, sensors as well as overall system architecture safety are key risk sources for functional security.
Moreover, when vehicles communicate with external networks via车联网(V2X), they generate large amounts of data interaction which opens up cybersecurity and privacy risks.
'Risk protection is a fundamental requirement in the transportation industry,' said Li Lison from Taiping Re (China). 'Changes at the industrial end will eventually impact insurance providers; thus, advancements in smart connected vehicles necessitate new requirements for automotive insurance.'
Product development faces challenges
Insurance coverage has become an important research topic regarding pilot programs of intelligent networked vehicle access and road use. In June this year, Beijing solicited public opinions on its draft Autonomous Driving Vehicle Regulations which stipulate that entities applying to conduct innovative activities with autonomous driving vehicles must purchase compulsory traffic accident liability insurance (CTALI), carrier's responsibility insurance, passenger accidental injury insurance as well as commercial third-party liability auto-insurance or open a bank guarantee for road accidents.
The regulations also encourage insurers and car manufacturers to collaborate in developing specialized products tailored towards the unique characteristics of self-driving cars. However, current market offerings are primarily designed with traditional vehicles in mind lacking dedicated coverage options suitable for potential incidents during testing phases of smart connected automobiles leading to numerous challenges when it comes to product development and operation.
Firstly, responsibility determination is difficult under existing legal frameworks where accident liability typically hinges on driver behavior but becomes more complex once autonomous driving systems take over. This complicates investigations raising costs while prolonging resolution times.
Secondly, the shift in liable parties poses another challenge as some pilots specify that manufacturers or operators assume primary responsibility when no human drivers are present necessitating changes to insurance policies and product design accordingly.
Lastly, designing appropriate products is challenging due to limited data on high-level autonomous driving vehicles making risk assessment difficult. Although these cars feature advanced sensors generating substantial test datasets their varied formats complicate analysis while constantly evolving algorithms further hinder stable underwriting practices.
Currently available insurances mainly cover traditional risks like collisions or personal injuries but fail to address emerging cybersecurity threats leaving certain scenarios unprotected.
Despite progress in policy and regulation, China's smart connected vehicle insurance sector remains nascent with regional differences posing potential issues for cross-regional operations necessitating continuous updates from regulators based on technological advancements.
Innovative development needs steady advancement
'Autonomous driving technology is still evolving rapidly,' Li Lison noted adding that legal environments will also change accordingly over time requiring adjustments to insurance policies.
Internationally, Tesla in the US integrates auto-insurance into its autonomous vehicle deployment cycle using driver behavior and car performance data for risk reduction. Japan offers commercial-specific insurances targeting ADL4 systems where providers pay monthly premiums leaving hardware suppliers exempt from direct liability; analysis post-accident determines responsibility based on software or hardware faults.
Taiping Re (China) has been researching relevant policies since 2019 developing specialized pricing models and innovative products to cater for the unique needs of smart connected vehicles. Their dynamic model architecture allows automatic updates as autonomous driving levels increase adjusting factor weights accordingly until human-related factors are phased out entirely at higher ADLs.
In China, PICC Group has also initiated development work on dedicated insurance terms since 2022 providing risk coverage according to local requirements in test zones accumulating valuable data and experience for future product design. They collaborate with major car manufacturers conducting studies into the effectiveness of autonomous functions like automatic parking or emergency braking systems.
'Currently, China's smart connected vehicles are still transitioning from testing phases onto roads,' said Cai Zhiwei Vice President at PICC Group adding that low claims rates won't impact business operations in short term but companies must stay ahead by studying industry trends and preparing innovative products addressing human-machine responsibility issues to meet diverse consumer needs.
'Given the rapid technological evolution of smart connected vehicles spanning multiple sectors, insurers alone cannot provide comprehensive services,' Li Weimin General Manager at Dinhua Insurance's Auto Department noted emphasizing cross-industry collaboration as key for building robust insurance systems. Insurers need cooperation with re-insurance companies, car manufacturers and operators to leverage complementary strengths.