Promises and Pitfalls of Autonomous Vehicles: Implications for the Insurance Industry

Vehicles with autonomous features seem to be a promising development for the automotive and transportation sectors. By automating driving tasks which are currently the responsibility of human drivers, such technology might be able to: 1) perform certain tasks better than human drivers in which the technology will be less error-prone than humans; and, 2) free up human drivers and make commuting more productive or enjoyable.
Nonetheless, there is a large gap between the potential promise of autonomous technologies, and the performance of autonomous technologies currently available. This gap has been prominently highlighted by recent events involving Tesla’s “autopilot” feature. In one recent incident, a Tesla driver using autopilot was killed when his vehicle did not stop when a tractor-trailer turned in front of his car. In another example, a driver in China who had sideswiped a parked vehicle while driving his Tesla noted that the “autopilot” feature in China was interpreted to be fully autonomous rather than “assisted” driving.
Tesla is not the only automobile manufacturer offering some selection of autonomous driving capabilities. Mercedes, Infiniti, BMW, Volvo and Ford offer or are currently working on vehicles with some level of autonomous capabilities.
In the near term, autonomous driving features will likely be limited to assistive technologies that help drivers maintain their lane, navigate slow-moving traffic, park, and maintain and safe distance behind other vehicles. Not long from now, however, car manufacturers such as Ford plan to offer what is called “Level 4” autonomous driving, where all driving tasks normally done by a human are instead done by the vehicle.
For the insurance industry, these technological changes raise questions about the future of private and commercial auto insurance lines. Among them: Will autonomous technologies really reduce accidents? And, if so, by how much? Are there certain situations in which autonomous technologies might make driving more risky? In the case of an accident, where does liability fall when an autonomous vehicle is involved? With the driver, or with the manufacturer?

Project Mentor

Daniel Engler
Jim Jones

Specific Questions

  • Technological – What are the current capabilities of autonomous driving systems? What capabilities are being promised in the future, by whom, and when?
  • Commercial (Customer, Dealer, After-service) – How have consumers adopted vehicles with autonomous features? How likely are consumers to accept fully autonomous vehicles? What are the particular barriers and facilitators to adoption? Are car dealers willing to sell fully autonomous vehicles? Are there barriers to the servicing of fully autonomous vehicles?
  • Regulatory – Where do autonomous vehicles fall from a regulatory standpoint? Do current regulations support or oppose autonomous vehicles, and in which ways?
  • Legal – What are the liability issues that arise when vehicles are controlled by software written by a manufacturer as opposed to a driver?
  • Risk – How does all of the above affect the insurance industry?

Final Deliverable

The findings of the student team will be formalized in a student-authored white paper and slide deck as a Katie School Student Research Study.