The “automated vehicle” (AV) – also known as the autonomous vehicle or driverless car – is here. The AV is no longer part of a vision of the future; real, functioning AVs are on the road in California (thanks to Google and its “Chauffeur Project”) and will soon be in other states. The UK government is testing AVs in Milton Keynes in Buckinghamshire, and Singapore will begin tests on its public highways later this year.
The AV has not made much headway in Canada, a fact noted in a recent report from the Conference Board of Canada. But, as the report indicated, the introduction of AVs – which could take place on a large scale as soon as 2025 – can have a tremendous impact on public policy, household finance and many other areas.
Possible effects cited by the report include:
- A reduction in road fatalities in Canada by 1,600 from the current 2,000 a year;
- A total economic benefit of over $65 billion per year from factors such as collision avoidance, fuel cost savings, and congestion avoidance;
- A sharp reduction in the nearly 5 billion hours per year that Canadians spend driving; and
- Total potential cost savings estimated at nearly $3,000 per household, representing close to 4 per cent of the average total household budget, or over 5 per cent of total household consumption.
The report calls for Canada’s government and business leaders to start studying and planning for the large-scale introduction of AVs sooner, rather than later. Although the report does not focus specifically on insurance, it is clear (or should be) to insurers that the automated or driverless vehicle represents the ultimate in disruptive technology – one that can change forever the way vehicles are owned, used and insured.