High-Tech Car Theft – Are They Ruining Your Motor Portfolio?
Gone are the days when a thief armed with little more than a screwdriver could quickly hot wire your car and drive it away. Over the last few years the auto industry has made great advances in the use of electronic security features, leading to a big reduction in car theft, that’s benefitted drivers and their insurers alike. However, it’s becoming clear that the use of some hi-tech components in car design, allowing them to connect to the Internet, could actually introduce new security vulnerabilities that criminals can exploit. In the first part of our three-part series on high-tech car theft, we will be taking a look at the technology and how it’s affecting motor theft.
Electronic security features, such as encrypted key and engine immobiliser systems as well as GPS tracking, are now available across most vehicles. But as more sophisticated automotive control systems are deployed in conjunction with wireless interfaces - keyless ignition, Bluetooth, GSM, Wi-Fi connectivity and diagnostics - the potential for criminals to hack automotive systems is growing.
While the headline trend is for falling rates of motor vehicle theft, we are seeing a spike in losses in some markets and specific makes of vehicles, as criminals learn how to circumvent modern immobiliser technology.
It’s possible the problem will grow. The “Internet of Things” is going to make cars more susceptible to cybercrime as motor vehicle control systems are increasingly connected to external systems and networks.
Many of today’s high-value motor vehicles already incorporate cutting edge technologies whose unidentified vulnerabilities could increase their exposure to cybercrime. Security-circumventing technology is readily available and it can be used without training or technical ability, boosting the capability of crime syndicates and joyriders alike.
And while theft is usually the focus for organized crime and joyriders, there are other potential loss scenarios created by “auto hackers”, including disabling safety or control systems with malicious intent.
Of course, security gaps can be closed with software fixes once they have been identified. Aftermarket electronic and physical security devices could also be used to protect specific makes and models of vehicles with particular vulnerabilities, as we will explore in the second part of the blog series.
But it can be hard for insurers to identify trends and then take account of such rapidly changing exposures in their underwriting.
At Gen Re we recognise the challenges that new technology presents to motor underwriters, particularly in the high-value segment where the portfolio may be small or unbalanced, poorly performing, or written as an accommodation line.
We can help by providing Individual Risk and Automatic (Program) facultative reinsurance for high-value motor risks, including super sports and luxury vehicles, covering first-party and/or third-party perils.
Our non-proportional solutions are cost effective because they are designed to respond to the major and total loss events that can impact your portfolio, without including the overhead of transacting reinsurance on small frequency losses (within your retention).
Call us to find out how to mitigate hi-tech risk and smooth out the ride in your motor portfolio.
If you are interested in learning about claims trends in high-value vehicle thefts, watch for our next blog by Anna Dalton.