A government-backed initiative to improve safety standards on Swedish roads could reduce the size of the motor insurance market.
Technological progress has produced more ways of making life easier in the past century than ever before. People's mobility has been revolutionised: whether by land, sea or air, we are now able to travel vast distances in a very short time.
But there is a drawback. If somebody today were to invent a system that satisfied every imaginable travel need, but with the minor side effect of killing 45,000 people per year in Europe and 125,000 worldwide, that system would have little chance of ever being introduced. But it has been already. Few people have noticed it, but perhaps that is because of the extreme differences in the way the risks associated with various types of accident are perceived. Large-scale one-off events such as rail accidents or aeroplane crashes are portrayed in the media as major disasters, while the much larger number of road traffic fatalities goes practically unnoticed.
The Swedish parliament, however, refuses to acquiesce to the high number of road accident victims in its country. In 1997, the ‘Vision Zero' plan was born, the aim of which is to reduce the number of deaths on the road to nil. Roger Johansson, co-founder of Vision Zero and a member of the Swedish National Road Administration, recently held a presentation on the scheme at Bayerische Rück.
The safety philosophy underlying Vision Zero permits no form of mobility that accepts a risk of people being killed or seriously injured. The physical integrity of the human body is the focal point of all considerations. The long-term objective is not to reduce the number of accidents, but instead bring down the number of fatalities and serious injuries on the road to zero. In the medium term, the target is to halve the number of fatal accidents by 2007 compared to 1996. In Sweden this implies that not 5.6 per 100,000 inhabitants as at present but at most 2.7 should die on the roads. (For the sake of comparison: UK 1999: 6.3; EU 1999: 12.)
Speed is the crucial factor in nearly all accidents that cause death or serious injury. The human body can survive impacts resulting from speeds of not more than 30 km/h, the natural speed limit for unassisted human motion. Our bodies are unable to assess nor survive the hazards triggered by faster movement. We do not have the ‘genetic antenna' for higher speeds. To be able to appreciate speed-related hazards, we can translate speed risks into other risks for which we have more feeling. Altitude, for example, is a risk we can relate to, because man has always had a natural fear of heights. Who would take his child for a carefree walk along the brink of a precipice? And who would drive at breakneck speed across a narrow bridge without side-guards over a deep valley? But nevertheless we expose ourselves to comparable risks every day, without even being aware of the dangers.
What to do?
Vision Zero aims on the one hand to make road users aware of the dangers and to heighten their risk perception. On the other hand, the system is error-tolerant and accepts that mistakes of judgment will be made. It attempts to identify and offer the best possible and acceptable solutions for road users. Consequently, it attributes a major part of the responsibility not to the road users alone, but to the road traffic system as a whole, both to the designers of Vision Zero and to carmakers and road-builders. Drivers telephone at the wheel, bend down to change radio stations or forget to belt up – the list of potentially accident-causing risks is endless. The primary aim is not to attempt to ‘educate' the car drivers, but to reduce hazard potentials a priori by means of expedient design features. Loudspeakers integrated into headrests, radio controls on the steering wheel, interlocks that prevent the car from driving away until the seat belt is fastened are just a few examples of these.
Direct actions are also envisaged as a means of achieving the Vision Zero objective. For instance, speed has already been reduced to 30 km/h in built-up areas throughout Sweden. In non-populated areas, the intention is, wherever possible, to provide the roads with a broad dividing strip to ensure a wider passing distance between vehicles travelling in opposite directions. Where this is not possible, a speed limit of 70 km/h is to be imposed on overland roads. Physically dividing a country road yields a safety level equal to that of a four-lane motorway, but the conversion costs only one-tenth as much as building a new road. And last but not least, more financial resources are to be dedicated to the infrastructure and to Vision Zero, to make further actions possible.
The Swedish parliament has set a signal that deserves to be followed. Not wanting to go along with the risks that are known to exist in road traffic and that cost thousands of lives every year, parliament has, by adopting Vision Zero, taken one of the most radical decisions ever in the field of road safety. The scheme conjures up new perspectives of how a society has to accommodate diverse players in a complicated world in order to reduce risks.
There is much to indicate that the Swedish Vision Zero initiative will be a great success. Its implications for the insurance industry cannot yet be quantified, but it is easy to imagine them, especially bearing in mind the universal export potential of such initiatives. But in the light of the appalling numbers of fatalities on our roads, any potential drop in insurance premiums fades into the background. The number of accidents involving human casualties is 325,000 per year in the UK alone. Of the people involved in accidents, 3,500 were killed and 40,800 were seriously injured. About 10% of all motor liability insurance claims in 1999 were for injuries suffered. Bodily injury claims account for about 36% of overall claims expenditure, with a rising trend.
Thus, expenditure on injury claims amounted to about £ 2.5bn. Of this sum, £195m was for serious injury claims involving awards of £1m or more. Assuming the same amount for serious individual claims of less than £1m each that could avoided by means of initiatives such as Vision Zero, the scale of potential savings in claims and thus premium reductions becomes evident. As a result, the market for motor insurance will probably not be halved in the foreseeable future, but a significant shift in the claims landscape is on the cards.