Lawmakers in Europe and other parts of the world are requiring that all new vehicles are fitted with telematics devices to improve safety on the roads. Could this soon be a reality for South Africa? And what lies ahead for the South African vehicle industry, telematics providers, and ultimately, everyday road users if this comes to pass?
It’s obvious that the time for interconnected vehicles is now. The majority of manufactured vehicles today are rolling off the assembly lines with telematics technology pre-installed, which is a nice-to-have for vehicle owners, but in many countries, it’s also required by law – in others, it soon will be.
“The latest vehicles are now manufactured with onboard telemetry solutions, which provide a wide range of diagnostic, location, and other information,” says Tarina Vlok, General Manager of Elite Risk Acceptances, a subsidiary of Old Mutual Insure. “It is widely considered that it will be a standard feature in all future vehicles.”
These connected vehicles generate huge amounts of data, driving the global proliferation of the Internet of Things (IoT), improving safety measures, but also challenging many lawmakers to tackle the touchy subject of data privacy legislation.
In the European Union, the Road Safety Programme continues to be rolled out in phases. The first phase (2001-2010) centred around making passive safety devices mandatory in all vehicles, which included safety belts and airbags – all standard stuff these days. The second phase (2011-2020) was aimed at enforcing mandatory installment of safety measures such as electronic stability control, lane departure warning systems for trucks and buses, and seat belt reminders. The Commission focused on Driver Assistance Systems such as anti-collision warnings by retrofitting them to commercial and private vehicles.
Telematics plays a central role in these directives, but where it gets really interesting is in the Commission’s following note:
“The Commission will propose new technical specifications under the Intelligent Transport Systems (ITS) Directive so that data and information can be easily exchanged between vehicles and infrastructure (for example, to enable real-time information on speed limits, traffic flows, congestion, pedestrian recognition.)”
ITS relies on computers, electronics, sensors, telecommunications, and satellites, all working together and sharing information between the various sensors and receptors. In practice, this would enable fairly rigid traffic processes to be more flexible in adapting to changes in current events on the road. A traffic light can turn green for an approaching bus if no other vehicles are detected in other lanes, for example, but the use cases go way beyond the flipping of a light switch. If a road network behaves as an organism that can communicate between its various functioning parts – vehicles, pedestrians, roads, traffic lights – it changes everything we currently know about safety on the roads.
Under its new General Safety Regulation, the European Commission decided that vehicle safety systems such as sensing technology, cameras, radar, and laser technology will become mandatory in all new vehicles in EU member states by July 2022. These technologies either assist the driver or take over all driving duties. In rolling this out, the EU plans to bring down the number of road fatalities to zero by 2050, an initiative named Vision Zero.
Vision Zero was first implemented by Sweden in 1997 and has been adopted by more than 20 cities across the world. “It’s a holistic safety approach that shifts responsibility from the people using roads to the people designing them, integrating core management and action areas to create a safe mobility system forgiving of human error,” according to the Vision Zero website.
Can you imagine the insurance implications of a road fatality rate equal to zero?
Commissioner Elżbieta Bieńkowska, responsible for Internal Market, Industry, Entrepreneurship and SMEs at the European Commission, says in a media release by the Commission: “Every year, 25,000 people lose their lives on our roads. Most of these accidents are caused by human error. We can and must act to change this. With the new advanced safety features that will become mandatory, we can have the same kind of impact as when the safety belts were first introduced. Many of the new features already exist, in particular in high–end vehicles. Now we raise the safety level across the board and pave the way for connected and automated mobility of the future.”
So, can it be done in South Africa? Likely not in the same timeframe given the expensive infrastructure and general rate of technological adoption in the country, but zero doesn’t have to be the only goalpost.
Hendrik Heyns, Chief Operating Officer at Brolink, explains that telematics is a precursor to an environment that relies more heavily on artificial intelligence and machine learning, which will ultimately create a world in which apps and telematics are connected to external data sources, creating a one-stop, interconnected environment. In other words, an ITS.
Insurers don’t have it easy in adopting these solutions. It’s been a challenge for the industry to implement telematics solutions, as it’s been seen as big brother intervention of sorts. “It has led to a low adoption rate worldwide,” Vlok says.
Justus Van Pletzen of Netstar, a subsidiary of Altron, summarises: “Telematics data will continue to be very valuable in terms of determining who is at fault in an accident. Going forward, there will be many opportunities for telematics providers and insurers in the electronic vehicle and autonomous vehicle spaces.”
The companies that survive will be those that disrupt the status quo with new digital products; businesses that reinvent conventional insurance offerings, says Heyns. “Digital innovation is key to winning customers and creating new revenue streams. Analytic innovation – which includes predictive and prescriptive analytics of big data, artificial intelligence, and optimisation – is conquering the world, and the insurance industry along with it.”
Sedick Isaacs, Head of Support services at Bryte Insurance, says that risk prevention continues to be a fundamental part of risk management, and data is a key enabler in risk prevention. “Telematics can add tremendous value in South Africa, where the rate of crime and road accidents remain considerable,” he says. “Telematics can play a crucial role in improving driver behaviour, providing relevant statistics that can help enhance overall safety, and offering insights into vulnerability-related trends.
Heyns says that South Africa is considered a mature market for telematics penetration, with around 12% of vehicles fitted with some kind of telematic device.
Netstar, for example, is actively working with local car manufacturers in leading the adoption of these technologies. The telematics provider currently works closely with one of the largest car manufacturers in the world, installing a telematics device in every one of that manufacturer’s vehicles in South Africa.
“Eventually, we’re going to reach a point where telematics providers partner with vehicle manufacturers to provide the features seen in interconnected and autonomous systems,” says Van Pletzen. “That’s how I see the future playing out.”
Interconnected cars aren’t going anywhere. There is some tricky territory to navigate regarding privacy and adoption, but it seems a small price to pay for a future in which no-one has to die on the roads due to human error.