Self-Driving Cars Could Have Substantial Impact On the WC System, NCCI Says

Nancy Grover

Boca Raton, FL ( – While claim frequency has been decreasing overall in recent years, that is not the case for motor vehicle-related claims. In fact, more than 40-percent of work-related deaths in the last five years have involved a motor vehicle accident. Severity is also a concern, as motor vehicle-related claims typically involve more serious injuries, resulting in average claims costs that are 80- to 100-percent higher than the average claim cost.

Advanced technology in the form of partial- or fully-autonomous driving vehicles could turn these statistics around, according to a new NCCI Insights report. Safety features already available have the potential to drastically reduce injuries. The Institute for Highway Safety reports a potential 56-percent reduction in front-to-rear collisions with injuries when automobiles have forward collision warning systems and autobrakes.

“Overall, the key safety systems associated with autonomous vehicle technology could benefit the industry through improved workers’ compensation claims experience,” NCCI said. “In fact, a recent review of potential workers’ compensation industry game changers showed that a 25 percent to 75 percent reduction in the frequency of claims related to motor vehicle accidents could yield an annual workers’ compensation system savings of between $1 billion and $4 billion.”

One caveat is that workers using automobiles with newer technologies must be adequately trained. NCCI cited a study that showed drivers using an automated parallel parking system were less aware of their surroundings and relied more on the automation. Drivers need to be aware of the limits as well as the advantages of the technology, such as when and how they may need to take control of the vehicle.

In addition to a reduction in the number of auto-related claims, autonomous vehicles may decrease workers’ compensation exposure in affected job classifications, thereby reducing premium volume. Driving-related job classifications comprise approximately 25 percent of all workers’ compensation payroll and about 50 percent of workers’ compensation premium.

Self-driving cars could reduce the need for motor vehicle operators. Since driving related job classifications typically incur higher rates/loss costs on average, a shift away from these jobs would likely move workers from higher- to lower-rated class codes.

“Therefore, all else equal, a decreased demand for drivers would likely reduce overall workers’ compensation premium volume which is directionally consistent with the expected decline in system costs due to reduced motor vehicle accident-related claim frequency and severity.”

The change may require modifications to the workers’ compensation classification system, NCCI explained. “Currently, more than 300 NCCI class codes contain ‘drivers” in their descriptions. If the introduction of self-driving vehicles warrants changes to the classification system, one option would be to create one or more new class codes. An example of a classification established in response to evolving technology is Clerical Telecommuter Employees (Code 8871).”

Short of creating new class codes, existing codes could be revised to include self-driving vehicles. Drones, for example, are now included in several classification codes.

“Given the prevalence of motor vehicle accidents and driving-related classifications in the workers’ compensation system, autonomous vehicles may have a growing impact going forward,” the report said. “Therefore, it is important to consider this impact and plan for potential structural changes that may result from this technology.”

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