On Aon — Episode 97
Risk and Resilience in the Age of Autonomous Vehicles
Autonomous vehicles and self-driving technology are no longer futuristic — they’re transforming how we move today. As adoption accelerates worldwide, insurers face a new set of risks and opportunities. Jillian Slyfield, Aon’s global chief innovation officer and global technology and digital economy leader, joins David Carlson, global industrials and manufacturing leader, to discuss key industry partnerships and the regulatory challenges shaping ride technology.
Key Takeaways:
Experts in this episode:
Key moments:
0:45 The autonomous vehicles (AV) sector is expanding quickly — the industry is projected to grow from just over $100 billion in 2021 to more than $2 trillion by 2030, impacting how we think about mobility, risk and insurance.
10:40 The collection of data from autonomous vehicles will lead the way to better underwriting and faster claims adjudication in insurance. However, a big unresolved issue is who owns and can access this data.
15:00 Collaboration among insurers, brokers, fleet operators, OEMs and AV tech creators is at an all-time high and is critical to managing emerging risks.
Additional Resources:
Article: Navigating Risk in Transportation and Logistics: Gearing Up for Big Transitions | Aon
Report: Findings from Aon's Global Risk Management Survey | Tenth Edition
Soundbites:
Jillian Slyfield:
“But coverage is changing. I wouldn't say that we need new forms of coverage, but we do need to think differently about the coverage that's in place and how to put it together in the best possible way. Sometimes we say it's like a jigsaw puzzle. Let's make sure the pieces are in the right places.”
David Carlson:
“The reality is people are still car enthusiasts. People love to drive cars still. That's just a reality. And so, I think in time, these things will evolve and we'll see more adoption.”
Intro:
Hello and welcome to this episode of On Aon — where we dive into some of the most pressing risk capital and human capital issues businesses around the world are facing.
Today we’re looking at the issues surrounding autonomous vehicles and what their increasing use means for manufacturers, users — and the insurance industry.
Joining us are Jillian Slyfield, Aon's Global Chief Innovation Officer and Global Technology and Digital Economy Leader, and David Carlson, who’s the global industrials and manufacturing leader here at Aon. Together they examine the latest trends in driverless car technology, regulation and why collecting data is so important to manufacturers and insurers.
Jillian Slyfield
Welcome to this episode of On Aon. I'm Jillian Slyfield and I'm Aon's Global Chief Innovation Officer and Global Technology and Digital Economy Leader.
In this episode, we're diving into the world of autonomous vehicles, a sector that's not just reshaping how we move, but how we think about risk and insurance.
This has been an important year for self-driving technology. Autonomous vehicles are no longer just concepts, they're becoming a reality in the streets of the U.S., China, and Europe.
And the industry is experiencing explosive growth with the global market projected to accelerate from just over a $100 billion in 2021 to more than $2 trillion by 2030.
But how do we incorporate new technology into insurance programs? With me today to discuss the issues surrounding driverless vehicles is Dave Carlson, who's the global industrials and manufacturing leader here at Aon.
Great to have you with us today, Dave.
David Carlson
Glad to be here, Jillian.
Jillian Slyfield
So let's dive right in. I'm excited for this conversation. We have talked a lot about how autonomous vehicles are evolving and the landscape that they're in. What are the big trends that you've noticed over the past year or so?
David Carlson
Yeah, it has been evolving quite a bit as you and I do talk quite a bit about that. And I'll get the hardware side of it if you want. And then I'd love for you to come in and bring your perspective from the software kind of tech side.
But what we've seen in the landscape is pretty evident with what they call the unicorns or the new era and then the legacy OEMs. You see a lot of partnering. You see a lot of what used to be the personnel working together and then how the insurers are also starting to change a bit on some of the positions about it.
But ultimately, the landscape is really shifting around this ambition to go fully autonomous has really changed into more specialized practical application of a commercial application of autonomous technology.
And over the past few years, we've seen big trends around robo-taxis being used, mobility as a service, and how that's being utilized with AV technology. But even more so around commercial fleets, improved driver assist systems on commercial vehicles. But then military, drones, agricultural equipment, rail, last-mile delivery, material handling equipment and obviously regulatory policy is also starting to evolve.
So it's really about use cases in commercialization with a lot of investment that's been occurring. The scalability of it has been changing. Awareness and adoption has been changing too. But I know you have a perspective as well, Jillian.
Jillian Slyfield
Yeah, thanks. I think it's really interesting.
I've often heard the question, we've been saying that autonomous vehicles are coming in the next five years for the last 15 or 20 years.
And so the question that I get often is why now? What's happening now that makes this the five years that we need to be paying attention to? I would say we're kind of in the middle of that five years. And so if I think about, to your point, the use cases, and I go back even just 2020. So if I look back five years ago, we had a steady state in the new mobility arena. We had ride-share companies participating. We have platform-enabled delivery. They were growing, but we didn't see massive disruption in that space. We just saw growth. We also saw some autonomous players with a couple of pilots here and there.
But today is very different. Today we see massive technological advancement from an autonomous vehicle perspective and from an electric vehicle perspective. And those two tend to go hand in glove.
Evolving partnerships — there is not a day that goes by that we don't hear a partnership announcement between autonomous vehicle maker, a driverless car technology, and an OEM, might be driverless in a rideshare company. Those partnerships are really accelerating. And then on top of that, and I think right now, so far at least, facilitating it is the regulatory environment.
So in the US, we're paying attention, you look at China paying attention to the regulatory environment, you're starting to see autonomous vehicles in the UK and across Europe.
So those three things coming together — technology, partnerships, regulatory — are really driving this forward, no pun intended. And then when I think about… okay, let's throw the ball forward five years from now — because we said it's a five-year plan — the technology is starting to scale, right? It's getting cheaper to do this as we get better. The technology is getting smaller, and so it fits into vehicles. So, the technology is becoming scalable. There's widespread adoption and there's true, I would say a disruption now again, across the whole mobility landscape.
David Carlson
Yeah, I would totally agree with you.
And along those lines, with the tech and the operational side evolving, I'm real interested in your perspective — because I know how much you and your team have really been working in this sector — around the evolution of insurance and how it's evolving to address the risk of AVs.
Jillian Slyfield
Yeah, thanks, Dave.
I'm really proud to say that Aon has been focused on this space for a decade now with a dedicated team. And we're so excited to have you as a part of that team and a new addition to our team and the thought leadership that you bring from an automotive perspective.
But coverage is changing. I wouldn't say that we need new forms of coverage, but we do need to think differently about the coverage that's in place and how to put it together in the best possible way. Sometimes we say it's like a jigsaw puzzle. Let's make sure the pieces are in the right places.
And the coverage elements that we're thinking about are product liability. So if we think about are who's creating the driver (the autonomous driver) we think about product liability, general liability, auto liability, and cyber liability coming together to create that best puzzle solution for any one client.
And the reason there isn't a one size fits all is because it depends on who you are in the marketplace, right? Are you the platform that's bringing the vehicle to the rider that needs it if you're thinking about a robo-taxi element? Are you the autonomous driving technology, which could be also the car? Sometimes it's not the car. Sometimes it's put into an OEM, as you know. Who are you in the marketplace is a big question around what liability you need to take on and how we build a program.
So I wouldn't say that there's a new product, if you will, that solves for the autonomous challenge. Instead, it's how do we think differently about the products that we have and bring them together in a way that solves for any one of these unique use cases. We love your thoughts on it.
David Carlson
Yeah, and I think that that kind of moves me into the thought process around: so some of these trends like the shift to robotaxis and more commercialization, those applications require looking at it, as you said, almost a convergence of different coverages.
I think about it a lot like cyber years ago. When cyber first came out, cyber was embedded in property policies. You kind of found a little bit over here and there. And then the insurance industry started to grow. We started to some critical mass. We started understanding the risk. Claims started occurring.
And so the next thing you know, cyber started to become its own bespoke product.
And then there was exclusionary language. The endorsements were being lost. And I believe, firmly believe, that's going to be happening with this technology over time.
The other thing is you look at the intensification of advanced driver assist systems and the use of AV technology to better lane departure protections, adaptive cruise control, all the different biometric technology that's inside the car, all built to help create a safer road experience and driving for the passengers. Then also just the alignment of electrification and autonomous technology. It's a nice marriage there, right? Instead of having to convert an internal combustion engine with all the tech and everything, you can build a vehicle on a different platform and be able to just put that together that way. The old top hat skateboard approach is what they call it with the EVs.
Well, it is a good infrastructure integration, if you will, to make it an electrification situation, highlight the, again, the evolving complex landscape of regulatory standards. In the United States, you have NHTSA, the DOT, all the transportation safety, state regulated insurance versus federally regulated programs, and then international, whether it's a EMEA or APAc and what they're doing to enhance and grow the use and adoption of AV and EV.
And you've mentioned something earlier too, just consumer awareness and adoption is so important to this. The reality is people are still car enthusiasts. People love to drive cars still. That's just a reality.
And so, I think in time, these things will evolve and we'll see more adoption. But at this point in time, I think those are some of the big things. And you also mentioned consolidations are huge, right? You know, used to be the enemy of my enemy is now my friend. You get a lot of people working together you would have never thought.
And new entrants like you mentioned, people like Nvidia, Waymo, Zoox, like all these new names coming up. And the legacy OEMs and some of the newer OEMs are saying, “Hey, let's all partner because we're not a data and technology that's new, a lot of our systems that's new for them.” And so they're like “Hey, I'm better off doing this kind of joint venture convergence and partnership than trying to go it alone anymore.”
So yeah, I think this is important.
Jillian Slyfield
I think that's such an important comment, Dave. Because those partnerships have been essential in this acceleration of growth. I think if I look back a couple of years, it was us versus them, new tech versus old legacy companies.
And I think what they've realized is that they both do an element of this with excellence. And when they come together, then the market really proliferates. And it doesn't have to be like, do we only have self-driving vehicles or are we going to drive ourselves? That's not the question. To your point, people love to drive.
But they don't love to drive in a crowded inner city where they have to try to find parking and they're just trying to get from A to B in between meetings. That's a great use case for RoboTaxi.
So we can have both. And I think that's what we're finally starting to see. You also brought up another great issue. I think we could have an entire conversation about this, which is data as both a risk and an asset, right?
And so when we're talking about that with autonomous vehicles, I often think we have more points of data around every element of a transaction or a mile covered than we've ever had before with, well, we think of it as auto insurance or any kind of auto capture of data.
And that includes information that we get from telematics, lidar, connected car data. But how we use this data is creating new risks and new opportunities, both for insurers and for AV companies.
And there's privacy issues when you're inside a vehicle like that and it takes you from A to B. If we're speaking about robotaxi, where did you go? Who were you with? What does that look like? Do we capture that? Do we not?
So, it's interesting. But when we use that data, come back to insurance for a minute, we can really accelerate the underwriting accuracy and even the claims adjudication process, both accuracy and timeliness. Huge benefit, right?
But big question is who owns the data, right? And so is that shared between the OEMs, the fleets, the insurers, the passengers? This is a big risk issue. And of course, data privacy, whether you're in the United States, whether you're in Europe, no matter where you are in the world, is something that we're all talking about every day. So very interesting conversation around data privacy to be had here too.
David Carlson
Yeah, and I'm going to grab that with an anecdotal point. And then I'm going to go into some more of the kind of operational side. And then I know you've got four or five great points to close us off.
So, my anecdote is, when I testified before Congress, the House Finance Committee on the influence of autonomous vehicles on insurance, this was in 2017, to your point, the insurers that were on that panel with me, their number one concern was access to data. And you and I both know that one of the big trends is point-of-sale insurance by OEMs because now they have the data because the vehicles are the data access point.
So it's really interesting how that's grown and evolved. That's a great point that you brought up, Jillian.
I'll pivot to companies in these trends in AV, the first thing I always think about is concept to commercialization, like truly understanding what that ecosystem looks like. Something as simple as supply chain resiliency and the impact on critical parts, software, chips, rare earth minerals. These are all critical things that companies need to be thinking about. Regulatory changes. These are huge trends, not only in the United States, as I mentioned earlier, but what's going on in EMEA and APAC. And their adoption rates, to be honest, as we all know, are much better than the United States right now. Whether it's EV or the robotaxi services. I was just recently in London. I think every black cab was electric. That's great adoption that's going on over there.
The risk appetite of organizations, the products of automotive products and the challenges of insurance have been there for decades. But now you add in electrification, battery technology and AV, new tech like LIDAR systems and warning systems. With every new risk and new development of technology, you've got to address it.
And then finally, just thinking about confirming the intentions with your carriers and your broker partners as an organization like this is where we're going or we're to start making products that will change the scope of our risk as a company.
I think ultimately organizations next, they just need to be nimble and have the courage to embrace change and know that this industry is incredibly resilient and it is an incredible industry and has great consumer brand and reputation.
So, organizations just, I think in five to 10 years, yeah, we will see a lot more adoption and we'll see a continuance of this use of AV technology. But I know you've got five really great points to finish up on, Jillian. So I'm going flip it back over to you.
Jillian Slyfield
Yeah, thanks Dave. I'm going to make one comment before I go into my kind of final five points, which is that collaboration that you mentioned between who we think of as our client companies, whether those are any of the fleet partners we've talked about today, fleet owners, AV operators, AV technical creators, OEMs — any of those companies — that collaboration between us as the broker, the insurance carriers and those clients have never been stronger. I've literally never seen it be better than it is today.
The carriers are excited for this coverage. They're excited to be a part of this new industry. And I think sometimes we hear that our industry might lag behind some others from an innovation perspective, but I absolutely do not see that in the new mobility space. The carriers are stepping up.
They're excited to learn. They're willing to put capital behind the risk but they want the information, they want collaboration. It isn't just give me the data, it's help me understand your business, help me understand your risk mindset, and help me understand your data so that we can all get this right together.
So I think that collaboration, we can't talk about it enough because it's so critical to being able to scale this growth for this business.
When I think of what are the key considerations, some of them we've touched on, and a couple I would love to come back another time and have a conversation about.
But, certainly, when I think about it, number one, evolving coverage challenges and requirements. It's that jigsaw puzzle, right? It's piecing everything together to solve for our very specific client situation.
Increasing claims complexity. Now, I think there's some increasing claims complexity, but we also have the data element that helps us to solve for claims. So there's a balance to that one.
Increasing utilization of embedded distribution channels. So we're seeing a lot of these new OEMs, as you and I have talked about many times, with embedded insurance solutions. Buy the car, the insurance comes with it. Really interesting new distribution channels coming to light.
Some automation opportunities to enhance insurance process and offerings. So how can we adjudicate claims faster, as an example? There's so many opportunities here. And opportunities to learn now prior to the full market entry.
And the reason I say that is because we are all learning. Although you have an educated guess, I have an educated guess, so do carriers, AV partners. Where this will be in five years, we have an idea. But when we're all learning together, the capital providers are coming to the table with their perspective, our clients are coming to the table, our AV companies are coming to the table with their perspective, we all become better at solving for next year and the next five years.
Really exciting. So first I want to say thank you, Dave. I love this conversation. I look forward to continuing it with you. But that is our show for today.
So, to our audience, thank you all for listening to this increasingly important topic. And you can see that Dave and I both have a lot of energy and excitement . And then the next few months, we'll have more episodes on risk capital topics, including big trends for 2026.
So with that, until next time.
Outro:
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