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Written by: Ana Caceres-Silva, Professional MBA Class of 2018; James Dennany, Professional MBA Class of 2018; Katia Kobayashi Avanzini, Professional MBA Class of 2018

 

For today’s vehicle owners in the United States, buying auto insurance is not just a legal requirement; it is an expensive requirement. Drivers understand their auto insurance obligations. Auto insurance companies understand how to price their risks --after all, they have more than a century of experience with this model, along with historic data for underwriting traditional auto-insurance plans. But how will this change in the coming decades, as vehicles become more autonomous and perhaps become the norm?

As AV technology advances, traffic accidents will decrease. As accidents decrease so goes lower insurance premiums. It is an oft-cited statistic: more than 90%of all car accidents are caused by human error¹. As AV becomes widely available and safety features are added, the human error factor will be reduced and the number of car accidents will dramatically decrease². In fact, experts predict the reduction in accidents to be close to 81%. With fewer accidents, individuals will see a reduction in annual premiums³. It is estimated that premiums will drop 20% by 2035 and potentially more than 40% by 2050. Individual policyholders can expect this reduction to directly benefit them as average premiums decline.

Although this change will come with tangible savings for individuals, many issues regarding question of liability will need to be resolved. Accidents will still happen in the age of AV — caused by human error, hardware or software defects, or external conditions—and the resulting liability questions will gain complexity. We expect individual vehicle owners, product developers, and network providers will buy insurance accordingly. AV technology has the potential to allow insurers to easily identify causes of accidents and assign liability. Ultimately, questions of liability will still be decided by the courts, but we believe the benefits of reduced premiums will greatly outweigh the growing pains of liability considerations.

Despite the added complexity, savings on auto insurance premiums is certainly an attractive benefit of a future with Autonomous Vehicles and will be a part of a more affordable and robust transportation ecosystem available to us through this technology.

 

This blog is part of a series created under the direction of Bonnie Pierce, Lecturer in Strategic Management and Public Policy, for the GW Business School class “Business and Society: Autonomous Vehicles.”

 

¹ U.S Department of Transportation. (2017). AUTOMATED DRIVING SYSTEMS 2.0. NHTSA. U.S Department of Transportation.

² AON Empower results. (2016). Global Insurance Market Opportunities. AON Benfield.

³ Ibid.

Written By: Jubin Arora, GMBA Class of 2019, Crystal Martinson MBA Class of 2018, Michael Steinberg MPP Class of 2018, Aditya Sharma MBA Class of 2018

 

The elderly and disabled communities often face significant mobility challenges when undertaking everyday tasks and running simple errands. Often, it is difficult for these individuals to get to work, visit the doctor, and attend social activities. Thankfully help is on the way. In the very near future autonomous vehicles could provide a way for these individuals to become mobile, independent, and play an even more active role in the workforce and society.
According to the American Automobile Association, by 2030, there will be 70 million Americans older than 65 with driver’s licenses—a sharp increase from the 40 million registered in 2015. The increase in the number of elderly drivers on the road, due to the aging Baby Boomer generation, will present increasing challenges. Many elderly individuals live in suburbs or rural areas with limited or costly transportation options, which further compounds their mobility issues¹. Accidents and declining health will likely cause these elderly individuals to lose their licenses and thus their independence²; however, mobility is essential for continued participation in social and community activities, which provide necessary human interactions that boost health and well-being³. Those with vehicle access better utilize health and regular care options⁴. The availability of autonomous vehicles will be critical to improve safety while driving, transportation options, and quality of life with our aging population.

Autonomous vehicles will also expand mobility options for the more than 47 million Americans⁵ with disabilities, particularly the 6 million people who have difficulty accessing transportation. Although there are a wide range of disabilities that impact a person’s ability to drive, such as blindness, physical limitations, or deafness, highly or fully automated self-driving cars will allow most anyone to drive safely and independently. Paratransit, the tax payer-provided transportation services for disabled persons, can cost up to four times as much as mass transit options⁶ — where mass transit is even available. While there are distinct differences between the elderly population and the disabled community, both groups lack freedom and independence when they lack mobility.

When auto manufacturers, technology companies, and policymakers develop and evolve vehicles, software, and regulations, they must all accommodate the needs and concerns of the elderly and disabled communities. Empowering these large groups, by improving their mobility and allowing them to better integrate into the workforce and the community will benefit not just these populations, but society as a whole.

 

This blog is part of a series created under the direction of Bonnie Pierce, Lecturer in Strategic Management and Public Policy, for the GW Business School class “Business and Society: Autonomous Vehicles.”

 

¹Rosenbloom S., “Transportation needs of the elderly population.” Clin Geriatr Med. 1993 May; 9(2): 297-310.

²Lawrence, Eric. “When Should Elderly People Stop Driving,” January 20, 2014.

³Dickerson AE, Molnar LJ, Eby DW, Adler G, Bédard M, Berg-Weger M, Classen S, Foley D, Horowitz A, Kerschner H, Page O, Silverstein NM, Staplin L, Trujillo L. “Transportation and aging: a research agenda for advancing safe mobility,” Gerontologist. 2007 Oct; 47(5):578-90.

⁴Syed, S. T., Gerber, B. S., & Sharp, L. K. (2013). Traveling Towards Disease: Transportation Barriers to Health Care Access. Journal of Community Health, 38(5), 976–993.

⁵Auto Alliance, “Conference on Autonomous Vehicles and the Disability Community,” October 27, 2017.

⁶Saripalli Srikanth, “Are Self-Driving Cars the Future of Mobility for Disabled People?” October 11, 2017.

 

Written by: Tom Begley, Global MBA class of 2018; Ashley Winokurzew, PMBA class of 2019; Yana Kalashnyk, PMBA class of 2020

 

For more than 100 years traffic safety has been improving to keep drivers, passengers and pedestrians safe. Technologies like seat belts, airbags, and electronic stability control (all standard features today) have each dramatically reduced the number of automobile-related deaths and injuries¹. For example, electronic stability control saved an estimated 2,202 lives between 2008 to 2010². Still much more needs to be done. Autonomous vehicles promise a giant step forward. Today, human error causes 94 percent of all traffic accidents³, so new technologies like lane keeping, braking assist, and adaptive cruise control are being introduced to reduce the impact of human error. In the next few years, cars will introduce additional technologies that will even further reduce the chance for human error to cause an accident.

At present in the US, about 100 people die and more than 6,000 are injured each day in car accidents. Increasing automobile technology, making cars more autonomous, will be the major factor in reducing the number of driving-related fatalities and injuries,36,982 and 2,424,000 respectively, per year in the US.³ Currently, autonomous vehicles are driving in 56 cities around the world, including 17 in the US.⁴ These millions of driving miles provide experiences to continuously improve the safety of autonomous.⁵ Over the last 100 years, we have benefited from technological progress to benefit automobile safety. Over the next few decades, building on this progress, autonomous vehicles could remove human error from the traffic accident equation altogether.

 

This blog is part of a series created under the direction of Bonnie Pierce, Lecturer in Strategic Management and Public Policy, for the GW Business School class “Business and Society: Autonomous Vehicles.”

 

¹US Department of Transportation, Bureau of Transportation Statistics “Transportation Fatalities by Mode” and “Injured Persons by Transportation Mode”

²NHTSA “A Drive Through Time”

³NHTSA “Automated Vehicles for Safety”

⁴Bloomberg Philanthropies & The Aspen Institute “Initiative on Cities and Autonomous Vehicles”, 2017

⁵Waymo “On The Road”