Autonomous Vehicle Insurance Market Opens... Speeding Up Development of Dedicated Policies

In the Era of Autonomous Vehicles, Broader Liability on the Horizon
Lower Accident Frequency, but Potential for Greater Losses per Claim
Growing Interest in B2B Demand for Robotaxis and Freight Transport

As the commercialization of autonomous vehicles draws closer, the auto insurance market is also poised for significant change. Liability for accidents could be extended to software developers or platform operators, and new risks such as hacking and system failures are coming to the forefront. Insurance companies are accelerating the development of specialized insurance products and mobility data-based offerings in response.

According to the financial sector on July 1, the insurance industry is preparing for the commercialization of autonomous vehicles by launching dedicated insurance products and developing offerings based on mobility data.

AXA General Insurance recently agreed to collaborate with SOCAR to develop data-driven insurance products. The plan is to combine AXA General Insurance's expertise in auto insurance with SOCAR's mobility data to create insurance services that reflect drivers’ actual driving characteristics and mobility patterns. Specifically, the two companies plan to jointly research new insurance products utilizing safe driving scores and to expand the portfolio of insurance products available on the SOCAR platform.

Samsung Fire & Marine Insurance has also begun preparing for the autonomous vehicle insurance market. Last month, Samsung Fire & Marine Insurance signed a multilateral business agreement with the Ministry of Land, Infrastructure and Transport to establish pilot cities for autonomous driving. Through this initiative, the company plans to offer dedicated insurance for autonomous vehicles, providing coverage of up to 10 billion won per accident and a total of 30 billion won annually. Notably, the coverage has been expanded to include not only accidents caused by software developers and vehicle operators, but also cybersecurity risks resulting from external hacking. In addition, the company is establishing a 24-hour dedicated call center and on-site dispatch system, and is pursuing data-driven risk management through the establishment of an autonomous vehicle accident analysis center.

The reason insurance companies are moving to develop related products is that autonomous vehicles could fundamentally change both accident liability and the structure of losses. While a reduction in accident frequency could lead to lower premiums, the increased cost of vehicle repairs due to advanced equipment, as well as the higher costs of accident investigation and litigation, could result in greater losses per claim. Furthermore, new risks such as hacking or software defects—which have not been adequately addressed by traditional auto insurance—must also be newly incorporated into policies.

The high likelihood that autonomous driving services will first proliferate in business-oriented sectors such as robotaxis and commercial freight transport is also accelerating the insurance industry's response. While the conventional auto insurance market has revolved around personal policies, the era of autonomous vehicles is expected to bring increased demand for business-to-business (B2B) insurance targeting companies that own or operate vehicles.

An insurance industry representative stated, "In the age of autonomous vehicles, simply compensating for accidents after they occur will no longer be sufficient," and added, "It will become increasingly important to assess risks using driving data and accident analysis capabilities, and for various stakeholders—including manufacturers and platform operators—to jointly design insurance structures."

This content was produced with the assistance of AI translation services.