The Chinese auto industry is yearning for smart-car technologies. In December 2017, the National Development and Reform Commission, China’s chief economic planning agency, revealed a three-year plan highlighting the development of the smart cars industry as a national priority. Without a doubt, by 2020 one in every two new cars sold in China, the world’s leading car market, will be an intelligent one. This dramatic surge in demand for smart-car technologies has prompted Chinese investors, either directly or by proxy through investment funds, to search for new and innovative ventures in the field. Despite initially focusing on the US market, Chinses investors now turn to Israel, as American government bodies deem some Chinese investments in the sector perilous to national security, and block them.
One prominent example for the feisty Chinese hunt for Israeli smart-car industry endeavors, it the Qoros takeover which took place earlier this year. In January 2018, Israel-based Kenon Holdings Ltd. announced that a China-based investor related to the Baoneng Group had acquired a 51% stake in Qoros Automotive Co. Ltd., a joint venture spearheading automobile connected services, founded in 2007 by Kenon and Chery Automobile Co. Ltd. It was reported that the Boaneng-linked investor paid $1 billion for its stake, and became controlling shareholder in Qoros. Chinese heightened interest in Israel’s smart-car industry might also present an opportunity for the closely linked insurance industry. Insurance industries are currently working fervently working on adapting traditional car insurance to the digital age. Smart and autonomous cars raise many questions in regards to insurance applicability. For instance, if an autonomous car detects a threat on the road, say a 5 year old pedestrian crossing the street out of the blue, how would it react? Would sway in favor of the driver, the pedestrian, and how would a car insurer place responsibility?
Despite popular hype pertaining to autonomous cars, most people don’t understand how highly dependent these cars are on a sense of place. This means that if the map the autonomous car is relying on to navigate is wrong, then the autonomous vehicle is bound to make mistakes as well. French mega insurer AXA for example, is one of the many car insurers tackling this issue. AXA has supported the autonomous vehicle market from the start, and instead of resisting progress, has set out to determine the correct apportion of responsibility between the human driver and the vehicle manufacturer, in a time when decision making and accountability may be attributed to a robot, rather than the human factor.
Again Israel’s pool of ingenuity may prove useful to AXA and other insurers goals. Many multinationals embedded in the autonomous vehicle industry have opened research centers in Israel, such as General Motors. As local Israeli tech grows to play a pivotal role in autonomous car development, it can also aid the autonomous vehicle insurance market. AXA has even founded Kamet in 2016, an ‘Insurtech’ startup studio, specially dedicated to conceptualizing, initiating and accompanying disruptive products and services for insurance consumers. As Israeli tech takes great strides in the autonomous car industry, with insurance accelerators such as Kamet, insurers are not far behind.