From vehicle design, to smart sensors and real-time data tracking, technology is central to how risk is shaped, priced, and managed in the motor sector. For brokers, understanding recent shifts and guiding clients through them is more crucial than ever.
“One of the things that will continue to drive change and, dare I say, cost within motor insurance, is around the changes in vehicle technology,” said Jon Dye (pictured), director of motor underwriting at QBE. “The design of high-tech vehicles complicates insurance considerations. The fact is, they're more complex vehicles because they've either got more sensors or they're being made of eight types of steel or eight types of material.”
This complexity increases risk exposure. A recent report by Business Motoring noted: “Growing vehicle complexity and alternative fuel types may drive up premiums for UK motorists, as insurers face increased challenges in assessing risk and managing claims for high-tech cars.”
With high-tech vehicles like EVs, costs can escalate quickly. According to Dye: “When an electric vehicle has an accident, if you damage the battery, you're pretty much looking at a write-off.”
A report from Warranty Solutions Group echoed the high costs involved, stating that EVs come with unique components that are more expensive to manufacture and replace than traditional ICE parts. “The battery is the most expensive component, with replacement costs ranging from £8,000 to £12,000 for standard electric vehicles,” it stated.
Sarah Vaughan, founder and director of Angelica Solutions, noted: “Vehicles [are] getting increasingly complex to repair - even the most minor scrape (e.g. losing a wing mirror in a hit-whilst-parked incident) can require significant repair with all the sensors and electrics now embedded across a car.”
While complexity increases some risks, tech can also reduce accident frequency. According to Dye, technology helps via “safety and reducing accidents,” describing it as “a real positive in terms of reducing accident frequency.” He pointed to innovations like “automatic braking” and “lane keeping” as major improvements. According to an ADAS and Autonomous Vehicle International report: “Automatic emergency braking (AEB) systems alone are projected to reduce collisions by 35%, while lane-keeping systems can cut lane departure incidents by 28%, and blind-spot detection devices reduce collisions by 20%.”
AI is also entering the picture. Farmonaut reported: “AI-driven systems now analyse facial expressions, eye movements, and steering patterns to monitor alertness and cognitive load, intervening proactively - sometimes even autonomously stopping the vehicle if impairment is detected.”
Technology can also assist with risk mitigation in motor insurance. Dye highlighted telematics as a core tool: “It's important in terms of managing risk, but it's not just about having a black box collecting data - it's about how you use the data...”
He continued: “Data aggregation is quite important for those companies, and, dare I say, insurance as well, to understand and have it in a common format... even if it's going from two, three different devices.”
Telematics can also sharpen claims handling. Dye explained: “Claims is, again, the other obvious area where you can understand and get more information about actually, what did happen, either around the location or speed direction…camera footage and things like that.”
Vaughan added: “Under-declared mileage and address fronting are two examples of how the data can complement traditional underwriting information…Experience from selected telematics players has shown huge potential value in applying this data to claims fraud detection and to expedite liability decisions.” A 2025 Deloitte report echoed this statement, noting: “Real-time surveillance devices like vehicle telematics can reconstruct accidents and verify the legitimacy of claims.”
Brokers need to understand how technology affects underwriting outcomes. Dye noted there are risks when tech is not being used, but is available. “From a policy wording perspective, there could be exclusions within your wording around if you do not buy safety critical updates, or if you switch off technology that [is] safety critical within a vehicle,” he said. “I think... brokers need to be conscious of... what cover is actually being provided and making sure they understand the contract that they're recommending to their client.”
Dye encouraged a forward-looking mindset: “If you look at how underwriters assessed risk and pricing business in the past, it's very much been looking in the rear view mirror… looking at what claims have happened on this particular business. If a fleet or a business has just moved from a load of petrol cars to all electric cars, that's not an effective way, in my opinion, of assessing risk, because we know from industry data, it costs an awful lot more to repair.”
Vaughan agreed brokers must help interpret evolving exposures. She stated: “Driving behaviour directly affects premiums and risk. Brokers can help bridge the knowledge gap - educating clients on what factors impact their score, how it affects pricing, and what behaviours to improve to avoid future claims or cancellations.”
Brokers can take other practical steps to support clients by:
