South Korea has established the legal groundwork to develop highly automated “Level 4” self-driving cars by 2024. The legal foundation for Level 3 autonomous vehicles had already been laid out with the Ministry of Land, Infrastructure and Transport’s establishment of safety standards for self-driving cars, as well as with the enactment of the Act on Promotion and Support of Commercialization of Autonomous Vehicles (AVA), which took effect on May 1, 2020. This means a ministry-level mandate exists to designate self-driving roads and test tracks. Special insurance requirements have also been stipulated for test zones. Although there remains unanswered questions, especially regarding the allocation of liability, the new law offers a significant degree of progress and hope for advancements in mobility.

On a related note, the UK’s Law Commission launched several consultations to examine legal obstacles to the introduction of autonomous vehicles. Numerous topics related to regulatory issues were covered, such as driver negligence, cybersecurity, data retention and special accommodations. A general consensus was reached that adopting a unified licensing system would signal a departure from today’s fragmented approach and “influence what future regulations might look like,” according to Ben Gardner from Pinsent Masons. 

Insurers in countries with industry-leading technology are currently grappling with identifying who is at fault for damage or injury in autonomous vehicles. Experts say we’ll likely see  a shift in liability from drivers to manufacturers of vehicles and software. With calculations suggesting a significant decrease in auto claims caused by drivers, manufacturers would benefit from the lowered risk. In other words, it might be more advantageous for manufacturers of fully automated vehicles to increase purchase prices and assume liability, since the risk of accidents is significantly lower.

Although we are seeing huge strides made in development and verification of autonomous vehicles, the overriding challenge for the industry is putting in place reliable insurance regimes. Connected autonomous vehicles will profoundly change the paradigm of risk assessment, and auto insurers must amend existing laws with technological disruptions. If done properly, this cross-industry partnership will not only consolidate AV technology on a regulatory basis, but also foster economic development in future endeavors.