Waymo, Google’s self-driving car project, is expected to have driverless taxis on London streets by Spring next year. The firm’s first major robotaxi deployment outside the United States follows large scale tests in US cities like Phoenix and San Francisco. As the global race for autonomous mobility accelerates, Australia is gearing up to join the action. The National Transport Commission (NTC) is working on a regulatory framework that could see autonomous vehicles trialed by 2026 with the aim of commercially deploying robotaxis across the country soon afterwards.
Driverless vehicles like these autonomous taxis introduce a range of new insurance implications that fundamentally reshape the motor industry’s traditional risk, liability and coverage models. IB asked Simon Donovan (pictured), executive general manager of fleet focused underwriting agency DKG Insurance Group, if this could mean the death of motor fleet insurance as the industry knows it?
“No, self-driving cars will not kill insurance, but they will transform it,” said Sydney-based Donovan. “The industry will adapt rather than disappear.”
For insurance brokers, this shift opens up both challenges and opportunities by requiring new expertise to advise clients, adapt products and stay ahead in a rapidly evolving market. Instead of mainly protecting individuals from human error, Donovan said insurance for driverless vehicles will focus on product liability, fleet operators and technology risks such as software bugs and cyberattacks. He said Waymo’s London launch is a significant step with clear implications for Australia.
“It shows that regulators and technology providers now have enough confidence to let driverless cars operate at scale in major cities,” said Donovan.
The timeline for Australia is expected to be longer that Google’s London deployment.
“Our regulatory environment is more fragmented, with each state managing road rules, licensing, and liability frameworks,” said Donovan.
He pointed to recent autonomous vehicle trials of driverless shuttles in Sydney and autonomous trucks in WA mining operations. However, Donovan said widespread public robotaxi or freight use is still likely to be a decade away.
“Adoption will appear first in controlled environments such as ports, logistics hubs and mining before reaching mass urban rollout,” he said.
Motor insurance must adapt to these pending developments. Until now, this cover has developed based on the assessing a human driver at fault.
“With autonomous vehicles, responsibility shifts toward the vehicle manufacturer, the software developer, and the fleet operator,” said Donovan. “This will create a much stronger emphasis on product liability and cyber risk insurance rather than traditional motor cover.”
Insurance experts expect hybrid policies to start emerging that cover both human error and system malfunction – because the roads will still be a mix of human-driven and autonomous vehicles. For robotaxis and autonomous trucks, operators will most likely insure fleets under commercial policies, with additional coverage taken out against the technology providers.
“Over time, as accident rates decline, personal motor premiums may reduce,” said Donovan. “However, new risks will rise, from system hacks to software bugs and the insurance industry will need to price for those exposures.”
Instead of primarily covering individuals against human mistakes, insurers are expected to focus on protecting businesses, manufacturers and the public against technology risks.
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