The shift towards driverless cars will probably have a mixed impact on premiums, according to Munich Re Underwriting Manager Australasia Scott Reeves.

He says fewer accidents are forecast to shrink compulsory third party premiums, but repair costs on complex vehicles will probably rise. Increased premium collection will come from areas such as cyber risk and product liability, he says.

“The premium portfolios of insurers won’t suffer dramatically because of the other insurance products, the cyber, the equipment and third-party property damage that can still come about,” he told the Insurance Council of New Zealand annual conference in Auckland last week.

Driver error is estimated to cause more than 90% of accidents, but even without autonomous cars the accident rate has been dropping.

Mr Reeves says motor may account for about one-third of an insurer’s book, but projections for a dramatic decline based on removing human driver fault do not reflect all the complexities.

These may include the ability to choose the type of autonomous system, the importance of keeping systems up to date and the responsibility of drivers, software providers, car manufacturers and potentially road repairers.

“The insurance industry in particular is going to have to understand the issues and be prepared to adjust and innovate. We are going to have to know exactly who is doing what to assess this question of negligence, in order to assist this resolution of insurance claims.”

Mr Reeves says there are also questions around supporting injured people, such as when international manufacturers and suppliers are the target of liability action.

“Projecting lineally on what we see today and getting carried away with the technology will lead to overlooking the need for the most immediate solution for victims in accidents.”

He highlighted a UK Centre for Connected and Autonomous Vehicles statement that says victims should be in no worse a position if they are hit by a driverless car than a conventional vehicle.