The technology future is now

As a kid growing up in the '70s and '80s, technology was something that was very popular in movies like Star Wars and Star Trek; TV shows like Battlestar Galactica, Knight Rider and The Jetsons all showed what life would be like in the future, and how our methods of transportation would also change. 

My friends, the future is now! Look around and you will see so many car companies incorporating accident avoidance technology into their function and design for practically every new car on the road. It’s almost a standard feature, like an airbag. Airbags have no doubt saved lives, and it is with this goal in mind, geared toward consumer safety, that this technology is making its way to every automobile on the road. Consider this: The National Transportation Safety Board estimates approximately 1,700 people are killed in rear-end crashes every year, with another 500,000 injured in those accidents. It is with these and other statistics in mind that lead entities like the National Highway Traffic Safety Administration (NHTSA) to make some of the avoidance systems mandatory.

Here’s why: An insurance industry organization concluded that the Volvo XC60, equipped with the company's City Safe collision avoidance system, is 27 percent less likely to be involved in a fender bender.

"These are very large effects," says Adrian Lund, president of the Highway Loss Data Institute (HLDI), which is a subsidiary of the Insurance Institute for Highway Safety (IIHS). Additionally, IIHS tested collision-avoidance systems on 19 new models, giving its highest rating of "superior" to 14 of them.

Many of the vehicles that earned "superior" ratings are luxury models, including the BMW X3, the Mercedes-Benz C-Class and the Acura MDX. The IIHS tests measure the amount of time it takes a vehicle to stop while traveling at speeds of 12 mph and 25 mph. As the vehicles approach a barrier that resembles the back of an SUV, their crash-prevention systems kick in, alerting the driver to brake. Some of the models also feature technology that automatically forces a vehicle to brake to avoid a crash. The crash-avoidance systems rely on a variety of sensors, cameras, lasers, short- and long-range radar, or combinations of cameras and radars. Computers monitor what’s going on and, when appropriate, prompt some action from the car or the driver. Those actions may start with attention grabbers, such as a beep, a flashing dashboard icon, or such “haptic” signals as a tug from the seat belt or a vibration in the seat or steering wheel. The more advanced systems can apply partial or full braking force if the driver doesn’t respond.

Cost factor: Inexpensive technology
For pricing at around $300 (cost to consumer), there are systems available for compact cars that combine a pre-collision system, lane-departure warnings and automatic high beams. They use a camera and laser radar to notify the driver of hazards with an audio and visual alert. If the driver does not respond, it will help mitigate pre-collision speeds by approximately 19 mph if the driver does not apply the brakes on his or her own, and helps provide additional stopping power if the system determines that more is necessary. Manufacturers say that the pre-collision system covers speeds “at which at least 80 percent of rear-end collisions occur.”

For $500 (cost to consumer), there are upgraded packages available for “mid-size and premium models” which include all of the above plus pedestrian detection and adaptive cruise control, thanks to the fitment of millimeter-wave radar. Like the pre-collision system, the pedestrian-detection system works at relative speeds of between 7 and 50 mph and can reduce impact speed by approximately 19 mph. The radar cruise-control system works like most others, sensing cars ahead and adjusting vehicle speeds to compensate. Manufacturers plan to eventually make the systems accessible to some 70 percent of European customers, with plans for additional North American implementation.

Insurance: How this technology affects the consumer
HLDI examined forward collision systems offered on Acura, Mercedes-Benz and Volvo vehicles. PDL frequencies for Acura and Mercedes models were 14 percent lower when the vehicles were equipped with forward collision warning with autonomous braking than when they weren't. IIHS estimates that one in three fatal crashes and one in five accidents with injuries could be prevented if all passenger vehicles were equipped with forward collision warning, lane departure warning, blind spot detection and other safety systems.

IIHS also found that some models of Volvo, Mercedes-Benz, Honda and other manufacturers with crash avoidance technology had 14 percent to 16 percent fewer accident insurance claims, compared with the same models without the technology. In another study, the Israeli government last year commissioned Ron Actuarial Intelligence, an Israel-based consultancy and manager of motor bodily injury (MBI) insurance data, to study the effectiveness of collision avoidance systems by measuring the influence of a forward collision warning system (FCW) and a lane departure warning system, developed by Amsterdam-based Mobileye, on the expected claim cost in Israel. The study, which used software by business analytics vendor SAS, found that insurance claim frequency dropped by approximately 44 percent for privately-owned vehicles equipped with collision avoidance technology, compared to those without the technology.

The flip side
As they say, there is no money in the cure. While crash avoidance systems, backup cameras and other safety features avert accidents and injuries, cars and trucks with the technology are more expensive to repair when they do get into crashes. Some safety systems also don’t work well in bad weather and at night, and some drivers are turning off the systems because of annoying alarms and false alerts.

“Ron Actuarial Intelligence’s study is a great empirical proof point of where we are on the road to the end of auto insurance,” comments Donald Light, director of Celent’s Americas Property/Casualty Practice and author of the firm’s report “A Scenario: The End of Auto Insurance.” “As collision frequency drops, losses drop, and competition will force premiums down.” 

In fact, in support of this theory, one major insurance representative I personally interviewed at the NACE convention in Detroit in July 2015 told me that their company is preparing for a projected 50 percent drop in premium revenue based on lowered rates due to accident avoidance technology and driverless vehicles. 

Certainly in years to come, this technology seems to be a determining factor that could further reduce severities in the collision repair industry. That also has a ripple down effect through the economy that supports an industry. In 2013, there were an estimated 42,809 collision repair shops in the country that repaired 12,149,854 accidents, representing a total market value of more than $29 billion. When you look at the numbers, you can see that the emergence of accident avoidance technology and self-driving cars look to drive loss severities and incidents to all-time lows, and one could argue the beginning of the end of a once prevalent industry. 

Then again, maybe not just yet. A prior report from HLDI in 2012 showed that it typically takes approximately three decades for technologies to spread through the fleet or total cars on the road. The current analysis uses similar methodology but focuses on collision avoidance features. The analysis agrees with the 2012 report in that it expects it will takes decades before most vehicles on the road could have a given feature, either because it came as standard equipment or was offered as an option.  It would be at that time that you could then apply the surveyed data to every car on the road. Either way, it certainly seems like the clock is ticking.