'Braking' New Ground - Autonomous Vehicles & Workers Compensation

At a glance

Nearly one third of jobs in the United States require some driving.1 In the future, autonomous vehicles may partially or completely automate some of these jobs, which would impact a substantial portion of the workforce and, consequently, the workers compensation (WC) system.

NCCI data shows that driving-related classifications account for approximately 25% of all WC payroll and about 50% of WC premium. Therefore, it is important to consider the implications of autonomous vehicles now, even though the self-driving timeline remains uncertain.

Claims experience

Advancements in vehicle safety could substantially impact WC costs due to the prevalence of motor vehicle accidents (MVAs) in the system. In fact, recent NCCI research2 showed:

  • MVA claim frequency has increased in recent years
  • Over the last five years, more than 40% of WC fatalities involved an MVA
  • MVA claims cost 80% to 100% more than the average claim because they involve severe injuries (i.e., head, neck, multiple injuries)

Evaluating the potential impact of autonomous vehicles on claim frequency will be a challenge until the technology holds a more prominent market share. As a proxy, we can examine currently available driver assistance systems, such as automatic emergency braking and lane assist.

According to the Insurance Institute for Highway Safety, a forward collision warning system coupled with autobrake can reduce front-to-rear crashes with injuries by 56%.3 Assuming autonomous vehicles will have more comprehensive safety systems, MVAs with injuries may decrease by an even greater percentage.

Observed changes in accident frequency may be gradual as drivers slowly become familiar with the technology. In fact, one study suggested that drivers who used an automated parallel parking system were less aware of their surroundings and did not look toward the parking space as often as those drivers who did not rely on the automation.4 Decreased awareness could be an issue in scenarios that require the driver to take control of the vehicle, for example, such as during a system failure. However, this effect could be somewhat mitigated through education and training on autonomous vehicle protocol.

If current driver assistance technologies are any indication, autonomous vehicles may reduce MVA claim frequency if they are used as intended. Since these claims are more costly on average, a decline in the number of MVAs may also put downward pressure on average claim costs.

Overall, the key safety systems associated with autonomous vehicle technology could benefit the industry through improved WC claims experience. In fact, a recent review of potential WC industry game changers5 showed that a 25% to 75% reduction in the frequency of claims related to MVAs could yield an annual WC system savings of between $1 billion and $4 billion.

Exposure

Autonomous vehicles may not only impact the number of work-related accidents, but also the work itself. For example, a shift to autonomous vehicles could contribute to an increase in work-related productivity for on-the-job drivers (e.g., traveling salespeople) since time previously spent driving would be freed up for more productive tasks.

For other motor vehicle operators, full vehicular automation might eventually phase out jobs, decreasing WC exposure in those job classifications. This displacement would likely shift workers from higher- to lower-rated class codes, since driving-related classifications typically have higher rates/loss costs on average. Therefore, all else equal, a decreased demand for drivers would likely reduce overall WC premium volume which is directionally consistent with the expected decline in system costs due to reduced MVA-related claim frequency and severity.

Industry next steps

If growth in the utilization of autonomous vehicles redefines driving jobs, modifications to the WC classification system may be necessary, depending on the magnitude of the change.

A large portion of the classification system could be impacted by autonomous vehicles to some extent. 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).

Another more commonly used approach is to modify existing class code phraseology to encompass self-driving vehicles. NCCI most recently took this approach in an item filing that added “drones” to the phraseology of several classification codes in response to the increasing prevalence of that technology.

NCCI will continue to review and modify the classification system to ensure it meaningfully and accurately reflects differences in going-forward loss experience resulting from changes in the predominance of vehicular automation.

Closing thoughts

Given the prevalence of MVAs and driving-related classifications in the WC system, autonomous vehicles may have a growing impact going forward. Therefore, it is important to consider this impact and plan for potential structural changes that may result from this technology. NCCI will continue to monitor the status of self-driving vehicles so that the industry can be well-positioned to adapt to these and other technological advancements.

​This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.


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