Raphaël Kerdraon: “Insurers adapt to the digital revolution”

Les Echos: the connected vehicle is seen as a breakthrough in terms of safety: what are the repercussions for insurers?


Insurers are working on customising rating to match the profile of the insured. This is made possible by the collection of data relating to their driving, the number of miles travelled, the number of journeys made daily, vehicle use and possible erratic behaviour… The problem is therefore how to access that data. In addition, insurers are interested in so-called “advanced driver assistant systems” (Adas), which bring down claims experience. Some insurers apply a cut of 25% in their basic rating if the vehicle is equipped with three Adas devices.



Les Echos: what will be insurers’ strategy for the driverless car?


This will be a real revolution for insurers since we will be moving from a frequency risk to an intensity risk. We will be faced with losses of excessively large amounts and some rating models could disappear. For insurers, the motor insurance market represents around EUR 18bn in France. They estimate that between 40% and 80% of premium income could disappear over the next fifteen years. Their strategy is therefore to strive to make progress at the value chain level by creating new products for all parties concerned – vehicle and spare part manufacturers, software publishers, telco operators, etc. Risk will move from the driver onto these different players.



Les Echos: do these developments also engender cyber risks? How are insurers, manufacturers, rental firms and customers anticipating these?


The cyber risk is very real and very wide. It already exists with the connected vehicle. But it will increase tenfold with the driverless car, which is hyperconnected. Such attacks could range from theft to spying on the driver but also include ransom (the vehicle is blocked until money is paid over) and even action by terrorists or “hacktivists”. On the manufacturing side, this risk has been clearly identified and they are actively considering how to cooperate with the other players in their ecosystem. On an insurance level, cover for the cyber risk has developed over the last four to five years with policies offering good capacity but which will need to be adapted. At a customer level, brokers will have an important role in raising awareness. Rental firms will also have an advisory role to play.




Julie Le Bolzer