Recently, intelligent connected vehicles have been accelerating, achieving a "speed-up" in development. Cities such as Beijing, Shanghai, Hangzhou, and Shenzhen have all announced this year the expansion of autonomous driving test areas, paving the way for the large-scale application of intelligent connected vehicles. As more intelligent connected vehicles move from science fiction into the lives of citizens, some people admire the fast and worry-free travel experience, while others have doubts about the safety of autonomous driving: who is responsible for accidents in intelligent connected vehicles without drivers? Who pays for car insurance? In response to the safety risks of intelligent connected vehicles, governments, insurance institutions, car manufacturers, and operators are working together to build an insurance service system for intelligent connected vehicles.
There is an urgent need for safety guarantees.
Are the autonomous driving functions of new energy vehicles on the market the same as those of intelligent connected vehicles? Industry insiders introduced that according to the driving automation grading standards, driving automation functions include six levels from L0 to L5. Among them, L0 to L2 all belong to driving assistance, and the vehicles currently sold on the market at most are equipped with driving assistance functions. The L3 level conditional autonomous driving is an important "divide", which means that the subject responsible for target and event detection and response will shift from humans to the system. At present, China's L3 level conditional autonomous driving and L4 level high autonomous driving are transitioning from road testing and demonstration operation stages to road traffic stages.
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In recent years, favorable policies have been introduced in a dense manner, giving the development of intelligent connected vehicles a "green light". In November last year, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Housing and Urban-Rural Development, and the Ministry of Transport jointly issued the "Notice on Carrying out the Pilot Work of Intelligent Connected Vehicle Access and Road Testing", providing policy support for L3 and L4 level autonomous driving on the road for the first time. In June this year, the Ministry of Industry and Information Technology and other four departments issued again, China's first batch of 9 automobile production enterprises and 9 user entities组成的 consortium, will carry out intelligent connected vehicle access and road traffic pilot in Beijing, Shanghai, Guangzhou and other 7 cities, pilot products cover passenger cars, buses and trucks three major categories.
In July, the Ministry of Industry and Information Technology and other five departments jointly issued the "Notice on Announcing the Pilot City List of Intelligent Connected Vehicle 'Vehicle-Road-Cloud Integration' Application", the pilot list not only covers first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, but also includes many provincial capital cities and prefecture-level cities, exploring the construction of low-latency and high-reliability connected cloud control infrastructure, providing richer application scenarios and data support for the widespread application of autonomous driving.
Data released by the Ministry of Industry and Information Technology shows that as of the first half of the year, the country has built 17 national-level intelligent connected vehicle test areas, 7 vehicle network pilot areas, 16 "double smart" pilot cities, opened more than 32,000 kilometers of test roads, issued more than 7,700 test licenses, tested more than 120 million kilometers, and deployed more than 8,700 sets of intelligent roadside units (RSU) across the country.
With the increase in autonomous driving levels, the driving subject shifts from "human" to "autonomous driving system", and intelligent connected vehicles present different risk issues from the past, also giving birth to new insurance protection needs. According to the "White Paper on Intelligent Connected Vehicle Insurance Innovation" (hereinafter referred to as the "White Paper") recently jointly released by Taiping Reinsurance (China) Co., Ltd. under China Taiping and the China Asia-Pacific Reinsurance Research Center, both chips, algorithms, sensors and other parts, as well as the safety and reliability of the overall architecture system, will become important risk sources for the functional safety of intelligent connected vehicles. In addition, when the vehicle network communication function is turned on, the vehicle will have a large amount of data interaction with the outside world, which opens up a gap for the network security risk and data leakage risk of intelligent connected vehicles.
"Risk protection is a basic demand of the transportation industry, and changes in the industry will eventually be transmitted to the insurance industry. The development of intelligent connected vehicles will inevitably put forward new requirements for car insurance." Li Lisong, General Manager of Taiping Re (China), said that the insurance industry was still in the stage of observation and thinking about how to carry out intelligent connected vehicle insurance. However, with the acceleration of the industry and policy ends, the urgency of solving this problem has greatly increased.
Product development faces challenges.
For various intelligent connected vehicle access and road testing pilots, insurance protection has become an important research content. In June this year, the "Beijing Autonomous Driving Vehicle Regulations (Draft for Comments)" solicited opinions from the outside world, clearly stating that "those applying to use autonomous driving vehicles for innovative activities should insure compulsory motor vehicle traffic accident liability insurance, carrier liability insurance, passenger accident insurance, and other commercial insurance with a certain liability limit for traffic accident liability, or open a certain amount of traffic accident compensation guarantee with financial institutions according to national regulations". At the same time, it encourages insurance institutions to develop insurance products that adapt to the characteristics of autonomous driving vehicles and provide insurance services for autonomous driving vehicle enterprises. It encourages cooperation between autonomous driving vehicle enterprises and insurance companies to jointly develop insurance products that adapt to the characteristics of autonomous driving vehicles.At present, insurance products on the market are primarily designed for traditional vehicles. Insurance companies lack dedicated insurance products to provide targeted protection for accidents and tort liabilities that may occur in the testing and application scenarios of intelligent connected vehicles. The development and operation of related insurance products face many new challenges.
Firstly, there is difficulty in liability determination. The White Paper shows that under the current legal and regulatory framework, the determination of traffic accident liability usually depends on the driver's behavior. However, for intelligent connected vehicles below Level 4, there is still interaction between the safety officer or driver and the vehicle when the autonomous driving is activated. The determination of accident liability after an incident is more complex than in traditional scenarios, which not only increases the investigation costs for insurance companies but may also lead to longer times for compensation processing.
Secondly, there is a shift in the responsible entities. "Some pilots have clearly pointed out that when autonomous driving is activated, the car insurance should pay compensation first. If there is no driver, the first responsible party is the manufacturer or operator." Zhang Lei, CEO of Cheche Technology, believes that the policyholder of insurance products will also change accordingly. In the future, car insurance may be more insured by car companies, and car owners only need to purchase limited types of insurance; under autonomous driving mode, car owners do not need to bear the premium.
In addition, there are difficulties in insurance product design. There is a lack of insurance data for high-level autonomous driving intelligent connected vehicles in China, and it is not possible to use a large amount of historical insurance policies and compensation data for risk assessment and modeling like traditional vehicles. Although intelligent connected vehicles have added various hardware devices such as sensors, the volume of test data is relatively large, but the disadvantage is that the sources are redundant, the formats are not unified, and the difficulty of data organization and transformation is great. At the same time, the autonomous driving algorithm is also continuously updating and iterating, making the insurance and claims data not stable and sufficient, which is not conducive to risk pricing by insurance companies.
For autonomous driving scenarios, the insurance industry is still actively exploring the development of related insurance products. In the current intelligent connected vehicle demonstration operation cases that have been implemented, the types of insurance purchased mainly include traditional car insurance, liability insurance, and accident insurance, etc. However, intelligent connected vehicles will also face network interruption, hacker attacks and other network security risks, and existing insurance products have not fully covered the above new types of risks, resulting in a lack of effective protection for intelligent connected vehicles in some scenarios.
Many industry insiders have said that although China has made certain progress in policies and regulations for insurance of intelligent connected vehicles, it is still in the initial stage of development, mainly focusing on the exploration and practice of some pioneering cities. Overall, there is no unified insurance standard for intelligent connected vehicles in China, and there are differences in policies across regions, which may encounter applicability issues in cross-regional operations in the future. Therefore, it is necessary for the government and regulatory authorities to continuously follow the latest technological and industrial development trends, timely adjust and improve relevant regulations and policies, establish a comprehensive risk-sharing mechanism, formulate special insurance clauses based on the technical characteristics and operational characteristics of intelligent connected vehicles, and provide risk protection for the innovation and development of intelligent connected vehicles.
Promote innovation actively and steadily
"The various technologies of intelligent connected vehicles, especially autonomous driving technology, are not yet fully mature and will be in a rapid iteration process for a considerable period of time, and the corresponding legal and policy environment is also constantly changing." Li Lison believes that the participants and responsible entities of future driving behavior will be more complex, and insurance for intelligent connected vehicles must also be adjusted and modified with the changes in the environment.
At present, domestic and foreign autonomous driving insurance products are still in the stage of innovation and exploration. From the international experience, in the United States, Tesla includes insurance as a necessary condition for the landing of autonomous driving in a closed loop, and improves its autonomous driving technology based on driver behavior and vehicle technical performance to reduce driving risks. Japan has introduced a commercial special insurance for Level 4 autonomous driving systems, which is insured by the system provider through a monthly payment to purchase insurance membership. Hardware providers and engineering equipment users do not need to purchase insurance and do not need to bear direct responsibility; after an accident occurs, the system provider is responsible, and then analyzes the data extracted from the vehicle's hardware and software to further locate whether the problem comes from the software or hardware, thus determining the responsibility.
The person in charge of Taiping Re (China) said that the company has started research on policies and risk assessment related to intelligent connected vehicles since 2019, tracking and analyzing the market situation of the intelligent connected vehicle industry, technical paths, and insurance needs, and developing targeted actuarial pricing models and innovative insurance product plans.To adapt actuarial pricing models to the rapid iteration of intelligent connected technology, Taiping Re (China) has innovatively designed a dynamic model architecture. As the level of autonomous driving continues to improve, the model automatically iterates and upgrades by adjusting the weights of different category factors or by adding or reducing factors. "For example, as the level of autonomous driving increases, cars begin to possess the ability to drive autonomously, and may not require any driving intervention from the driver. At this point, the model needs to adjust the number and weight of driver-related factors until all factors related to the driver are completely eliminated."
Cai Zhiwei, Vice President of the People's Insurance Company Group, also stated that the company initiated the development of exclusive insurance clauses for intelligent connected vehicles in 2022. It actively cooperates with the national strategy for automotive intelligence development, providing risk protection for intelligent connected test vehicles according to the insurance requirements of the test area, and has preliminarily accumulated data on underwriting and claims settlement for intelligent connected vehicles, as well as experience in accident handling. This lays a solid foundation for the development of exclusive product clauses and practices for intelligent connected vehicles in the next phase. "In terms of research, the company actively collaborates with various mainstream car manufacturers to continuously conduct special studies on the effectiveness of autonomous driving functions, including the effectiveness verification of APA (Automatic Parking Assistance), AEB (Automatic Emergency Braking for imminent danger), and other intelligent driving functions on the occurrence rate of specific accidents."
"At present, China's intelligent connected vehicles are still in the transition phase from testing to driving on the road, with about a thousand vehicles on the road, and the compensation rate is extremely low and very stable. In the short term, it will not have any impact on the company's business," said Cai Zhiwei. On one hand, the company will study industry dynamics in advance to grasp development trends. On the other hand, according to the requirements and arrangements of regulatory authorities and industry associations, it will reserve innovative products and clauses. It will focus on issues related to the definition of human-machine liability and the scope of related responsibilities to meet consumers' diverse needs for insurance protection for intelligent connected vehicles.
"Intelligent connected vehicle technology is rapidly iterating and involves multiple fields such as automotive, communication, and computer science. It is very difficult for insurance companies to provide comprehensive and high-quality insurance services relying solely on their own professional capabilities," Li Weimin, General Manager of the Auto Insurance Department of Dinghe Insurance, believes that cross-industry resource integration and cooperation are key to building an insurance service system for intelligent connected vehicles. Insurance companies, reinsurance companies, car manufacturers and operators, and insurance technology companies need to work together to form a complementary advantage.