how to use social q&a! - vermont captive … 2017/autonomous vehicles and...promote a...
Post on 16-Mar-2018
224 Views
Preview:
TRANSCRIPT
HOW TO USE SOCIAL Q&A!
(To access in an internet browser, go to vcia.cnf.io)
1. Vote for a Question 2. Ask a Question
Click on the Polling Icon on
the VCIA app
Click on your session
1
2
© 2017 VCIA; Speaker materials used by VCIA under license.
Autonomous Vehicles and Their Impact – Ready or Not, Here They Come
Chris Kogut, FCAS, MAAAPrincipal – Milliman, Inc.
August 9, 2017
Christina KindstedtSr. VP – Advantage Insurance
3
Catalyst for Change
Elements for Transformation
Insurance Implications
Recent and Upcoming Developments
Opportunities
Insurance Revisited
Agenda
4
1.2 Billion vehicles worldwide Safety: 1.2 million roadway fatalities worldwide Energy: 95% dependent on oil Congestion: Traffic delays Parking: Land use, delays, cost Environment: CO2 emissions Infrastructure: Aging and costly
Current system is enormously wasteful
Historical DNA
5
Electrical drive Electric motors Diverse energy sources Connected and coordinated Shared Driverless Tailored
Evolution or Transformation
2017 2025
6
Eliminate “negatives” of automobile transportation Enable compelling mobility experiences Reduction in costs Promote a sustainable future
Driverless & ConnectedVehicles
7
Safer More productive More personalized More affordable More convenient
“We are on the cusp of a new era in automotive technology with enormous potential to save lives, reduce greenhouse gas emissions, and transform mobility for the American people.”
Transformation
9
The whales (Google, Uber, Ford’s Argo…) have their own captives and can spend up to $1 billion on R&D
Middle market companies have raised $20MM -$100MM each for R&D
The minnows have raised <$20 million each for R&D “We have to carry insurance for R&D but we may not
be around next week after we’ve burned through $20MM. Find me an insurance solution now.”
The Transformers
10
Insured risks: Full blown AVs Kits/modifiers Fleet size
Premiums aren’t commensurate with accident rates in testing
Middle market developers and minnows are paying exorbitant premiums in testing stage
What will their premiums be when they commercialize their AVs or kits?
Risk Profile vs. Premium Rating
11
The questions are when and how… Not if
Technology
The biggest threat to autonomous technology: humans
12
Autonomous cars simply replace human eye with a camera
In current autonomous cars, the way the selection of pixels is analyzed could be the difference between a safe journey and an accident
Combat problem: connection between cars and traffic infrastructure
DOT: V2I communications Mature connected vehicle environment by 2040
Source: http://www.its.dot.gov/communications/media/15cv_future.htm?_ga=1.29576191.1709674119.1488645586
Infrastructure
13
Auto insurance is highly regulated, but which laws apply as AVs change the traditional operator / passenger roles?
Confusion over limits and coverage and policy forms Testing versus commercialization and their impact
on insurance needs Because AVs will be expensive to own initially,
possible new ownership models will complicate the traditional way of assigning financial responsibility
Legal & Regulatory Environment
14
NHTSA – Federal Automated Vehicles Policy, September 2016
Liability and insurance States responsible for determining liability rules for HAVs Rules and laws allocating liability could have significant
effect on both consumer acceptance and rate of deployment
DOT – National Connected Vehicle Field Infrastructure Analysis Press release 12/13/16: DOT advances deployment of
connected vehicle technology
Regulatory
17
Who will be held responsible in the case of an accident?
Assignment will be determined over time Will start on a case-by-case basis
Could shape opportunities for insurers
Key players are starting to develop legal strategies
Legal
18
Supply side is ready, but what about demand?
Each driver has a unique value proposition
Studies showed mixed interest But there is only a vague understanding of the technology
Suppliers will spend lots of money to make the public more aware of the capabilities
Consumer
19
A “tsunami of data will roll” Between vehicles, infrastructure, and other sources
The dashboard will connect the driver to email, internet, TV, phone
Data management: integrity, ownership, privacy, and analytics
Data
21
Autonomous vehicles dramatically affect all aspects of the insurance company’s entire business, from functional operations to market strategy
Yet 32% of insurance executives believe it will have no impact on the industry in the next 10 years
Insurance Market
22
Traditional carriers, given their nature, are slow to respond to AVs’ insurance needs.
Whales have their own captives which are expected to continue AV coverage after commercialization
RRGs can only write third party liability Group captives could provide a one-stop shop for medium and
small AV developers’ insurance needs but they need fronting carriers from limited pool of insurers who currently write AV coverage
None of medium or small developers are interested in a single parent captive as they see insurance as a product they have to buy in the current stage; when they become the next Google, they’ll develop their own single parent captive
Captive Insurance for AVs
23
Motivations for captive In a few cases, the premium is higher than the AV’s
construction cost, and that’s even before commercialization There’s no rationale in the premiums they’re paying to
traditional carriers right now Commercialization will take the premiums to a new high
Obstacles to captive Developers don’t want to share data, not unlike the ship
owners from the early 1700s until the ship owners realized they had to work together to spread their risks
A high ratio of AV developers go out of business very quickly
Reasons for/against Captives
26
Product Liability Sub-line of General Liability insurance
Manufacturer responsible for compensating an injured party for injury caused by defective product Product liability insurance provides protection against
financial loss stemming from the legal liability incurred because of injury or damage resulting from the use of covered merchandise
Historical Shift of “buyer beware” to strict liability for manufacturing
defects
27
Risk profile of vehicles on road will substantially decrease, leading to lower total losses for insurers
More than 90% of accidents each year caused by driver error
Potential 80% reduction in accident frequency by 2040 Results in ~2 accidents per 10,000 vehicles
HHS: Automating some parts of driving task is leading to reduction in claim frequency
More expensive components could increase severity Maybe Industry loss costs could drop by 40%
Loss Experience
28
New areas of risk in an autonomous world
Handle products liability
New products and/or risk management services
Product Development
29
Appropriate risk factors
Absorb real time data on vehicle and driver
Manufacturer control of information
Data privacy and security
Underwriting
30
Effects of new capabilities on loss frequency
Effects of next generation products (e.g., V2V communication)
Consumers start to demand discount?
Severity change
A new rate plan?
Rating
31
Expertise in product liability
Changes in coverage
New areas of risk
Systems to collect “accident” data
Expertise to understand data
Can you shape tort law and shape precedence in your state?
Claims
32
First known fatality in Tesla’s autopilot mode
Uber self-driving fleet in Pittsburgh
GM buys Cruise
Mobileye and Delphi team up
Volvo and Uber team up
Uber buys Otto
Fully autonomous hardware on all new Teslas
In the News…
34
One size does not fit all Depends on business plan
Know what to look for and be open to new considerations Diversity Innovation Partner
Opportunities
35
What is the right level of investment, now and over time Environment influx
Future IT plans contemplate massive amount of data
Competitive advantage
Right mix of business
Alliances and partnerships to consider
If premium volume falls, how will costs be reduced
Strategic Change
36
Change Management How much does your organization –
executives, board, stakeholders – know (or need to know) about autonomous vehicles?
How will you educate?
Quantify potential effects
Managing/mitigating the risk
37
Autonomous Vehicles:Are We Ready?
38
Or Is It Déjà Vu?
Sounds familiar?
Shipping in 1700s Ship designs were highly secretive
Trade routes were hotly contested
Construction technology was closely guarded
Click on “Evaluations”
Click on the session title
Answer all the questions! Thank you!
HOW TO EVALUATE SESSIONS ON VCIA 2017 APP
Click on “Start Survey”
41
This presentation contains general information only. VCIA and its guest speakers are not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Neither VCIA nor its guest speakers shall be responsible for any loss sustained by any person who relies on this presentation.
Disclaimer
top related