Cyber insurance likely to become common for autonomous vehicles

Published: October 23, 2018

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Insurance companies are wrestling with the potential industry upheavals caused by autonomous vehicles, including how liability will be defined in a changing transport marketplace. However, the growing cyber insurance market will also play a part and companies could be selling cyber coverage instead of auto insurance to owners of autonomous vehicles.

Indeed, as driverless cars become more common and more automated, brokers could be selling cyber protection for cars by 2040.

“Cybersecurity is a red-hot topic in the insurance world,” Sami Shaker, a physicist for Kodsi Forensic Engineering, told brokers attending a presentation on automated cars at the 2018 Insurance Brokers Association of Ontario (IBAO) last week. “These cars are going to be connected to the Internet. It is possible to hack these vehicles. You could imagine how your world is going to be with your customers. Maybe in the future, you will be talking about cybersecurity for your vehicle.”

Shaker predicts most vehicles will be fully autonomous by 2040 and he expects a mid-point of automation to human drivers to occur around 2025. As autonomous systems become dominant, the risk from cyberattacks will increase. During this time, cyber insurance will become more important.

Cyber Danger

The levels of autonomy in vehicles are as follows:

  • SAE Level 0 – human does everything, like current cars
  • SAE Level 1 – some in-car systems can aid the human in the operation of the vehicle
  • Level 2 – the autonomous tech can complete some driving tasks, but human monitoring is needed.
  • SAE Level 3 – the system conducts some driving and monitors some of the environment, but human must be ready as backup
  • SAE Level 4 – the system can conduct driving tasks without any input from humans. However, the system only works under some conditions. This is where the current market is.
  • SAE Level 5 is when the car can perform all tasks without the need for a human driver.

During his talk, Shaker showed a YouTube video from Wired magazine. The video showed one of Wired’s writers driving an SUV that was attacked by two hackers located two miles away. This demonstration showed how likely cybercrime is when vehicles are all connected.

“You may need cyber protection for hacking, not only of personal information, but even potentially for terrorist attacks,” Shaker concluded after the video was shown.