Image: Supplied
While the adoption of electric vehicles (EV) remains a major focus for the global automotive industry, the Gulf Cooperation Council (GCC) countries are a few steps ahead, fast emerging as a global leader in the future of autonomous vehicles (AVs).
More than just about technological innovation, the shift to AVs is reshaping the entire transportation ecosystem, and critically, the role of insurance. As governments and businesses in the region increasingly adopt autonomous mobility, the insurance industry must evolve in tandem.
 GCC leading the charge in autonomous mobility
The GCC nations, particularly the UAE and Saudi Arabia, are global pioneers in the adoption of autonomous mobility technologies. Dubai’s government, for example, aims to have 25 per cent of all transportation trips completed by autonomous vehicles by 2030.
This initiative, part of the broader Dubai Autonomous Transportation Strategy, aims to cut transportation costs, carbon emissions, and accidents.
Accordingly, Dubai has already conducted successful trials of autonomous taxis and buses and has plans to expand these services across the city.
For example, the Roads and Transport Authority (RTA) has completed testing of its Autonomous Air Taxi (AAT), an airborne vehicle powered by electricity, capable of carrying two passengers. Sharjah’s SkyBus is yet another example of transport ingenuity, an urban mobility system that runs on cables.
Likewise, Saudi Arabia’s futuristic city project, NEOM, is set to be a testing ground for AVs, part of its broader strategy to diversify the economy and reduce its reliance on oil in line with Vision 2030.
These initiatives are not just about technology for technology’s sake; they are fundamentally reshaping how people in the region will live, work, and critically, get from A to B. By prioritising autonomous mobility, the GCC is making cities more efficient, more environmentally sustainable, and essentially, more livable.
Traffic congestion, for instance, remains a significant challenge in many Middle Eastern cities. In Dubai, drivers lose an average of 33 hours a year stuck in traffic, and in Riyadh 31, according to the 2023 Inrix Global Traffic Scorecard.
Autonomous mobility aims to alleviate this burden by optimising traffic flow and reducing delays.
Transforming insurance in the age of autonomy
As autonomous vehicles become more prevalent, the insurance industry must evolve to address the new landscape of risks and liabilities. Traditional motor insurance models, which are primarily based on human driver behaviour, will need to adapt to account for the complexities introduced by AVs.
For example, if an accident involving an AV occurs, the liability may shift away from the vehicle owner and to the manufacturer or infrastructure provider.
Insurers will need to develop new frameworks to determine fault, assessing whether the AV’s software, sensors, or networked infrastructure was to blame. Additionally, the role of human intervention in AV accidents will need to be considered as well as human drivers may still have the ability to take control in certain situations and be indirectly responsible for the accident and insurers will need to develop policies that address these complexities.
Furthermore, the increased use of data generated by AVs will significantly impact the claims process. In the event of an accident, this data can provide a precise record of the incident thanks to sophisticated sensors and systems, helping insurers to assess liability more accurately.
However, this also raises concerns about privacy and data protection, making it vital for insurers and automakers to ensure that drivers’ data is used responsibly and that there are clear regulations governing its usage.
 Adapting to a new era: the role of insurers in the autonomous future
The success of autonomous mobility in the Middle East hinges not only on technological advancements but also on the ability of the insurance industry to adapt and innovate. As the region transitions to AVs, insurers will need to rethink traditional risk models and develop new products that address the unique liabilities associated with autonomous technology.
Introducing a complex product like autonomous vehicle insurance can be challenging, as insurers will need to have a deep understanding of the technology, its potential risks, and the evolving regulatory landscape. Insurers will need to invest in research and development to develop innovative products that accurately assess and mitigate the risks associated with AVs.
At the same time, private sector companies must collaborate closely with governments to create a supportive ecosystem for AV adoption.
Governments across the GCC are investing in infrastructure and creating regulatory environments that foster innovation. Insurers must be at the forefront of these developments, working with public and private sector partners to ensure the smooth, safe, and widespread adoption of autonomous vehicles.
As governments and businesses move ahead with ambitious initiatives, the insurance sector needs to adapt in parallel. Embracing innovation and adjusting to the evolving landscape will enable insurance companies to address the emerging requirements of their clients and contribute to shaping the future of mobility in the area.
Read: Are autonomous vehicles the key to sustainable mobility in the region’s EV revolution?
The writer is the regional MD for Asia Pacific, Middle East and Africa at Allianz Partners.
