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The future of motor vehicles: What does it mean for insurance and Fleet Managers?

At a glance

  • With technology developing quickly, people are expecting more from their vehicles
  • Car manufacturers are prioritising automated, connected and electric advancements – but each presents its own challenges
  • From complex repairs to an ever-changing specification of vehicle, what are Insurers & Fleet Managers having to think about?

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By reading this article, and correctly answering the three questions underneath, you will have achieved the following learning outcome: Recognise the latest trends in autonomous vehicle development and explain the impact on motor insurance.

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As the world we live in continues to adapt, so do the vehicles we drive.

Car manufacturers are continuously innovating and our vehicles are changing, so Insurers and Fleet Managers have to be prepared for the new challenges they bring.

According to the Department for Transport, in 2017 there were 37.8 million licensed vehicles on UK roads. With these vehicles travelling a total of 327 billion miles in that same year, it’s no surprise that we are expecting more from our vehicles. We look at three of the strategic priorities for vehicle manufacturers:

  • Automated
  • Connected
  • Electric


Automated advancements in cars can be there to either help to prevent a crash or to help increase your safety if a crash does happen. Examples of automated technology can already be seen in many cars and are increasingly depended on.  For example, Autonomous Emergency Braking, which will apply the brakes to prevent impact, has already been proven to see a 38% reduction in collision frequency and a 45% reduction in Third Party cost. It could be Adaptive cruise control, which adjusts your cruise control speed to ensure you still maintain a safe distance from vehicles ahead, through to lane keep assistance, which not only warns you if you are drifting out of your lane but can take corrective action to keep you on course. All of these are positive safety developments with clear and obvious benefits.

However, it is important to recognise the risks from this new technology. For example, whilst the technology is keeping drivers safer, what is there to prevent drivers becoming over reliant on the technology itself? Also how can we ensure that people know how and when to use the technology? The sophisticated nature of the technology also presents unique challenges for when repairs are required, often being more complicated and time-consuming.


For vehicle manufacturers another priority is making sure that cars are more ‘connected’ and cyber-smart than ever. This sees huge changes in how we look after our cars and what we expect for our convenience. Currently, through a mobile app, some vehicles can be locked/unlocked, heated or even programmed to ensure that their electric batteries are fully charged ready for a predetermined departure time. The software that enables this, which is essential in modern cars, will be updated over-the-air (similar to how our phones are updated).  For Insurers and Fleet Managers it won’t just be the make and model of vehicle that needs to be considered but also which software update the vehicle is on. Two vehicles could physically look exactly the same but the software version they’re on could actually affect performance, capability, behaviour and range.

As well as understanding changing vehicle specifications Liability could also become a contentious issue. Whose responsibility will it be to ensure the update has been completed? The manufacturer, the driver, the fleet manager? This could be particularly important if a crash could have been avoided had the update been completed.

Technology being used to keep cars connected like this is impressive, however it still creates its own vulnerabilities. If the software can be easily updated remotely, providing customers with the most up-to-date technology, however there is also the ever present risk of cyber vulnerabilities. By keeping vehicles connected, owners run the risk of potential hacking or ransomware crime; the consequences of which are difficult to determine as they could vary from a data breach through to vehicle theft itself.


The need for cleaner, more efficient, vehicles is becoming increasingly apparent. Whether it’s looking at electric powertrain systems or lightweight structures, the electric vehicle is becoming a manufacturer’s priority.

Using stronger but lighter materials is important to increase efficiencies while still ensuring the safety of drivers. The batteries and propulsion systems need to continue to advance to make sure that they will be suitable to demands of our current and future society.

With electric vehicles and sophisticated technologies becoming more common, we are entering a whole new area in terms of repairs. The repairs themselves can be challenging and costly, as well as depending wholly on batteries and the charging points they will require. The challenges for Insurers and Fleet Managers with electric vehicles are enhanced by the fact that safe, efficient and suitable electric vehicles are needed due to government initiatives to reduce carbon emissions. Electric vehicles and the charging infrastructure which will be needed also introduce new perils into Fleet Risk Management which previously would never have been considered.

Hybrid vehicles, defined as using two or more types of power, also present another set of challenges for Fleet Managers and Insurers. For example, hybrid vehicles require a more emission compliant catalytic converter. This is more costly and more attractive to thieves due to the precious metals inside (including Palladium, Platinum and Rhodium). To meet the required emission standards, some hybrid vehicles even fit two catalytic converters.

What does this mean?

Louise Kerrigan, Zurich UK Motor & Casualty Team Leader explains: “Vehicle management is becoming increasingly complex for Fleet Managers and equally challenging for Insurers. The positive advancements in automation we’ve looked at here depend on drivers understanding the technology on their vehicles and how to utilise it safely.

Customers can prepare for the future by ensuring they have a comprehensive and robust work-related road risk management programme in place that doesn’t conflict with operational practices. Policies and procedures should be reviewed ensuring Automated, Connected and Electric risks are incorporated therefore enabling employees to drive safely and ensure security vulnerabilities are reduced as low as practicable.

For Insurers, the future of fleet risk management will evolve at pace. Whilst the frequency of collisions should reduce, the claims circumstances will change and the cost of collisions will increase due to more complex repairs required, even for minor damage, the need to re-calibrate sensors and potentially even battery repair.

New features bring new risks and perils but we are learning and adapting to face these challenges with our customers.”

For more information on how to manage your motor risk, please get in touch with your local Zurich contact.

Image © Getty

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