The Future in Transportation: Autonomous Vehicles

Transcription

1 The Future in Transportation: Autonomous Vehicles They ll Change Insurance - Slowly Nevada Driving Summit May 25, 2016 James P. Lynch, FCAS MAAA, chief actuary Insurance Information Institute 110 William Street New York, NY Tel: Cell: jamesl@iii.org

2 When Computers Take the Wheel... 2

3 Step 1: Co-pilot In Theory Crashes Avoided Per Year All Injury Fatal Forward Collision Warning 1,165,000 66, Lane Departure Warning 179,000 37,000 7,529 Side Assist View (Blind Spots) 395,000 20, Adaptive Headlights 142,000 29,000 2,484 Total Unique Crashes 1,866, ,000 10,238 In Practice - Forward Collision Warning Working - Adaptive Headlights Working - Others: Benefits Less Clear 6% of Injuries 30% of Fatalities Some of These Features Are Already on Vehicles. Others Are On Their Way Soon. Source: Highway Loss Data Institute, Insurance Institute for Highway Safety, National Highway Traffic Safety Administration. 3

4 Step 1: Co-pilot Technology Emerges Slowly. Source: Highway Loss Data Institute, Insurance Institute for Highway Safety. 4

5 Step 1: Co-pilot 20 Years With Mandate, Longer Without. Source: Highway Loss Data Institute, Insurance Institute for Highway Safety. 5

6 Step 2: The Dream Vehicle Delphi prototype Roadrunner SF to NYC in Nine Days (4/2015) 3,400 Miles All but 50 Autonomous Issues: Unmarked Lanes, Heavy Roadworks, When Sun Was Low in Sky These Are on the Drawing Boards of Almost All Automakers. But the Dream Vehicle Is a Long Ways Away. 6

7 When Will This Happen? 90% 80% 70% Percent of Vehicle Fleet Minimal Price Standard Equipment 90% 80% 70% Percent of Miles Driven 50% of Market - a Generation From Now 80% 60% Moderate 60% 60% 50% 40% 30% 20% Expensive 20% 40% 20% 40% 50% 40% 30% 20% 30% 50% 30% 50% 10% 0% 2% 10% 2020s 1% 2030s 2040s 2050s 10% 0% 4% 10% 2020s 1% 2030s 2040s 2050s SOURCE: Autonomous Vehicle Implementation Predictions, Victoria Transport Policy Institute,

8 Why Will It Take So Long? Average Vehicle Age (Years) Recession Hangover People Struggling to Afford Major Purchase; Cars Are Built Better, Last Longer F 2017F 2018F 2019F Sources: Polk, August 2013 Survey, IHS Automotive July 2015; Insurance Information Institute. 8

9 Why Will It Take So Long? Q. Would You Be Willing to Ride in a Driverless Car? 2% Don t Know No 55% 43% Yes Most People Say They Would Not Ride in a Driverless Car. Source: Insurance Information Institute annual Pulse Survey, May

10 E 40,716 41,817 42,065 42,013 41,501 41,717 41,945 42,196 43,005 42,884 42,836 43,510 42,708 41,259 37,423 33,883 32,999 32,479 33,782 32,894 32,675 35,000 Deaths Deaths per 100 Million Miles Traveled Enhanced Vehicle and Road Safety Have Made Driving Much Safer Motor Vehicle Crash Deaths and Crash Death Rate, ,000 45,000 40, , ,000 25,000 20,000 15,000 10,000 Crash deaths are down 40% since the early 1970s, 14% in past 20 Fatal crash rates have fallen by 85% over the past 60 years, 35% in past , Fatalities Rate per 100 Million VMT Source: National Highway Transportation Safety Administration, Federal Highway Administration, National Safety Council; 2015 Estimates by Insurance Information Institute. 10

11 Fatalities per Hundred Million Miles Driven Sources: National Highway Traffic Safety Administration ,719 Traffic Deaths in 2013, 2.1% Less Than Auto Fatality/Injury Rates Have Been Falling for Decades. 11

12 But Auto Insurance Expenditures Rise $950 $900 $850 For Past 20 Years, Expenditures Rising About 1.5% Annually $ $750 $700 $ $ If Cars Are Safer, Why Are Insurance Costs Rising? E 15E Insurance Information Institute Estimates/Forecasts Source: NAIC, Insurance Information Institute estimate for based on Motor Insurance CPI. 12

13 Claims per 100 Insured Vehicles Claim Severity Auto Insurance: Frequency vs. Severity Frequency: How Often Is There An Accident? Down 55%! (1.6%/Year) 3.55 Down 63% (2.0%/Year)! Severity: How Big Is the Claim? 18,000 16,000 14,000 12,000 10,000 8,000 UP 1,251% (5.3%/Year) UP 1,666%! (5.9%/Year) 7,553 15, , Property Damage Bodily Injury ,000 2, ,231 1,288 1, Property Damage Bodily Injury Sources: Insurance Institute for Highway Safety, Insurance Services Office, Insurance Information Institute. 13

14 Auto Claims Have Grown Faster Than Inflation for 50 Years Percentage Change, % 1666% 1600% 1400% 1200% 1251% 1000% 800% 600% 650% 400% 200% 0% CPI-U Bodily Injury Severity Property Damage Severity 14

15 Impact by Coverage Type of Coverage Examples Frequency Severity Damage PD, Collision Decrease Increase Injury BI, PIP, MedPay Decrease Unclear Uninsured UM/UIM None None Miscellaneous Comprehensive None Increase Coverages on 21% of Premium Will Be Unaffected for Decades Autonomous Vehicles Will Have Different Impacts on Different Coverages and Will Not All Happen At Once. UM 8% Injury 35% Misc 13% Damage 44% 15

16 I.I.I. Poll: Who Is Responsible? Q. Who should be responsible if an accident occurred involving a driverless car? Car s Occupant Car s Insurer 11% 9% Don t Know 6% Car s Owner 24% 50% Car s Manufacturer Half of Respondents Think a Driverless Car s Manufacturer Should Bear Responsibility in Case of an Accident. Source: Insurance Information Institute Annual Pulse Survey. 16

17 I.I.I. Poll: Who Is Responsible? Q. Would you be willing to pay more for your car to cover the manufacturer s liability in case of an accident? Don t Know 2% 26% Yes No 72% Only a Quarter of Americans Would Be Willing to Pay More for a Driverless Car to Cover the Manufacturer s Liability in Case of an Accident. Source: Insurance Information Institute Annual Pulse Survey. 17

18 The Future of the Car of the Future Technology Has Been Making Cars Safer for Decades. It Takes a Long Time for Technology to Penetrate the Marketplace. The Size of Claims Has Grown Faster Than the Frequency of Claims Has Shrunk. Auto Insurers Should Be Up to the Challenge. 18

19 Insurance Information Institute Online: Thank you for your time and your attention! Twitter: 19