High-Tech Car Theft – How to Protect Your Book
Following Nick Harrington’s blog on what you need to know about new technology and the theft risk of high-value motor vehicles and Anna Dalton’s claims perspective on such risks, we are going to look at how different car models have been affected and the anti-theft measures that can be implemented.
Certain vehicle makes and models are more susceptible to theft than others. Statistics from the German Insurance Association show a significant spike in Land/Range Rover thefts in recent years. Whereas only 0.4 out of every 1,000 Land/Range Rovers were stolen in 2011, by 2013 that figure had risen to 3.1. Sources online suggest that, in many of these thefts, technology was used to gain access to and start the vehicle.
However, in response to the increasing trend, manufacturers are looking to improve their anti-theft technology. Porsche was the most popular target amongst car thieves back in 2010; 1.7 out of every 1,000 were stolen. That figure was down to 0.8 in every 1,000 in 2013, largely due to improved anti-theft measures implemented by Porsche. For example, all 911 Carrera models are now fitted with alarm systems and immobilisers that are disarmed via an in-key transponder and radar-based interior surveillance systems. Furthermore, the optional tracking system available makes it possible to locate a stolen vehicle across most European countries.
However, waiting for car manufacturers to improve anti-theft measures could prove costly for insurers that need to understand the options available to prevent theft. Immobilisers remain one of the most effective measures. The Thatcham Research Centre, which is funded by the motor insurance industry in the UK to investigate several issues, including car theft, recommends Thatcham Standard Category 5 or 6 devices. Category 5 has the benefit of an ID tag that identifies the driver. This means that if the vehicle is moving and the monitoring centre doesn’t recognize the driver, the vehicle can be disabled remotely.
Another good alternative is the “OBD lock.” It restricts access to the vehicle’s On-Board Diagnostics port, thereby preventing the security system from being compromised. Finally, low-tech solutions, such as steering wheel locks and parking the car in a locked garage, can prove to be surprisingly effective in a world of technology.
It is foreseeable that vehicle theft involving technology could be a threat to the profitability of an insurer’s motor portfolio. As systems are upgraded and improved, thieves adapt their methods as well. Keeping abreast of technological developments in the automotive industry will be key for insurers, as will thorough underwriting and pricing of vehicles that are especially susceptible to technology theft. Insurers that are able to distinguish poorly performing segments, such as Land/Range Rovers, from improving segments, such as Porsche, will be able to outperform the market.
At Gen Re, we are working hard to anticipate the impact of new technology on client business. What happens when the automotive industry uses generic solutions, such as iPhone apps to lock cars? What will be the impact of self-driving vehicles? Could hackers steal a car remotely via a computer? If these are your concerns, contact us.