Impact of Autonomous Vehicles

At the 2015 PRIMA Annual Conference, Jeff Myers and John Willemsen from Munich Re America presented a session titled, “Autonomous Vehicles: The Largest Impact to Transportation and Infrastructure”.

The NHTSA classifies five levels of vehicle automation from Level 0 – no automation to Level 4 – no human intervention needed.  Most vehicles are Level 1 with some automation (anti-lock brakes). Many vehicles are Level 2 (lane centering, auto braking, blind spot warnings). The Google Car is Level 3. Most manufactures are developing a level of automation for their vehicles. Tesla indicates they will have an autonomous vehicle on the road by the end of 2015.  By 2035 the expectation is that 25% of vehicles on the road will be autonomous.

There are moral and ethical implications associated with these vehicles. In a potental collision situation, the vehicle could have to decide whether the priority was to protect the vehicle occupants or a pedestrian in the path of the vehicle. For example, if the vehicle swerves to avoid a pedestrian, it could strike something and kill the vehicle occupants instead of the pedestrian. This is something that will have to be considered when programming these vehicles.

94% of vehicle accident are caused by driver error.  In the U.S. alone, there were 5.6 million accidents in 2013 and almost 33,000 fatalities. There is a significant portion of the U.S. economy devoted to recovery from auto accidents including towing companies, body shops, attorneys, parts suppliers, and medical providers. 16% of all organ donations come from death associated with auto accidents.

Autonomous vehicles are already being utilized in hazardous industries such as mining. Mercedes has a self-driving truck that they are currently testing. If this technology becomes widespread, it would completely revolutionize the trucking industry.

Insurance companies are concerned about the impact this will have on their bottom line. Appoxmately 40% of Property & Casualty  premiums are derived from auto insurance. With most accidents caused by driver error the technology should cause a significant decrease in accidents. On the liability side, with autonomous vehicles, the liability shifts from the driver of the vehicle to the manufacturer who supplies the technology.

There is a question of whether vehicle ownership would be needed in the future with autonomous vehicles. Everything could be “on demand” and you use an phone app to summon a vehicle when needed. This eliminates the need for things like parking garages. In large cities close to 1/3 of the real-estate is used for parking garages. This would allow that expensive real-estate to be developed.

Cyber risk would be a concern with autonomous vehicles. If hackers could get into the navitation programs they could reroute vehicles or cause accidents. System failures could also create a problem if the system suddenly needed to reboot itself.

Autonomous vehicles could impact municipalities in several ways:

• Road design. Autonomous vehicles could use narrower lanes and not need shoulders. This would allow current roads to handle a significantly higher volume of traffic.
• Parking tickets would be eliminated by the on-demand nature of these vehicles.
• Law enforcement also would not need to enforce traffic rules such as speeding as these traffic rules would be programmed into the vehicle. Enforcing traffic rules is a significant revenue source for many public entities.
• Decreasing traffic stops could have a negative impact on law enforcement as these stops provide opportunities to identify criminals with outstanding warrants and someone transporting illegal drugs.