On the Horizon: The Future of Autonomous Vehicles

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Text, Wednesdays with Woodward (registered trademark), a webinar series. On the Horizon: The Future of Autonomous Vehicles. Travelers Institute. Travelers. American Property Casualty Insurance Association. Insuring America. A P C I dot org. 

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I am Joan Woodward, I'm honored to lead the Travelers Institute; the public policy division and educational arm of Travelers. Today's program is part of our Wednesdays with Woodward, a series we started this past spring to explore issues impacting our personal and professional lives in these difficult and uncertain times. 

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Join our mailing list: institute at travelers dot com. LinkedIn. Connect: Joan Kois Woodward. Watch replays: travelers institute dot org. Hashtag Wednesdays with Woodward. 

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We're pleased you're here today, and we hope you'll stay engaged with us. You can join our mailing list by emailing institute@travelers.com, or connect with me directly on LinkedIn, there's my handle, or watch replays of our past webinars all at travelersinstitute.org. 

Before we get started today, I'd like to share our disclaimer about today's program on your screen. 

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Text, About Travelers Institute Webinars. Wednesdays with Woodward is an educational webinar series presented by the Travelers Institute, the public policy division of Travelers. This program is offered for informational and educational purposes only. You should consult with your financial, legal, insurance, or other advisors about any practices suggested by this program. Please note that this session is being recorded and may be used as Travelers deems appropriate. 

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We're thrilled to be joined by the American Property Casualty Insurance Association as our partner today. APCIA is a primary trade association for home, auto, business insurers. And a big thank you to APCIA President and CEO David Sampson, for partnering with us on this program. 

Today's conversation is going to focus on the future of our roadways, specifically how autonomous vehicles will impact our lives. This will be a fascinating look at the technology, including commentary from a leader in the AV space, which is Zoox. Zoox, as you may know, was acquired by Amazon in 2020, and it is their self-driving vehicle division. 

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Speakers. Joan Woodward, Executive Vice President, Public Policy. President, Travelers Institute. Travelers. 

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We're thrilled to welcome Dr. Mark Rosekind, Zoox's Chief Safety Innovation Officer to share his insights with us today. But to kick us off, we have my friend and colleague, Michael Klein. Michael is Executive Vice President and President of Personal Insurance here at Travelers. He's an industry thought leader on AVs. 

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Position Paper. Insuring Autonomy: How auto insurance will lead through changing risks. travelers institute dot org. 

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In 2018, the Travelers Institute launched our position paper, Insuring Autonomy, which outlined Travelers’ vision for the future of insurance and AVs. Michael helped lead that effort and joined the US Transportation Secretary and other leaders in San Francisco at that time, making sure that the insurance industry was represented at the table on this important conversation about the future of mobility. 

This week, the Travelers Institute issued an update to that position paper and we're thrilled now to hear Michael's take on the AVs in 2021 and beyond. Michael will join us for about 10 minutes of comments, followed by a conversation with Dr. Rosekind of Zoox. And after that, we want to hear from you. Please submit your questions throughout the program by using the Q&A function at the bottom of your screen. To send anonymously, if you don't want me to read your name, hit send anonymously. So let's get started. Michael, welcome. 

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Text, Insuring Autonomy: How auto insurance will lead through changing risks. Michael Klein, EVP and President, Personal Insurance. January 27, 2021. 

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Thanks, Joan. And it's great to be here on Wednesdays with Woodward, and merely looking forward to joining all of you in a conversation about ensuring autonomy and about autonomous vehicles in general. I think it'll be a great discussion. And I'm really looking forward to sharing Travelers perspective on the development and deployment of autonomy, and the improvements in safety that can come from it. 

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Title, Insurance enables innovation 

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Now, you might be asking yourselves, what role does insurance play in a conversation about autonomous vehicles? And really, the relevance here is that insurance enables an innovation and has throughout the history of innovation in transportation, in particular. Whether it was insuring the first vehicles in 1897, insuring the first air flights in 1919, or insuring the first space flights in the 1960s. Insurance has always played a role in innovation. And in particular, in transportation by being there to help answer the question, what happens when things go wrong? So we'll talk about insurances role and insuring autonomy. But before we do that, I'd like to start with a little bit of an update on the progress in the technology. 

And while I'm not the expert, I do want to share some perspective from how we view advancements in autonomy here at the Travelers. So certainly, if you pay attention to the headlines, you can see news about progress in the development of autonomous vehicles almost everywhere you look. 

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Title, Technology Continues to Progress. Waymo's driverless ride service moves metro Phoenix toward autonomous future. Daimler doubles down on self-driving trucks, starts partnership with Waymo. Zoox Reveals First Look at Autonomous, Purpose-Built Robotaxi. Volkswagon Creates Autonomy Division for Self-Driving Cars. Lyft Wants People to Be Hailing Fully Driverless Cars on its App by 2023. 

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And here's a sampling of those headlines and you see progress here on Zoox's part. But also, on the part of many of the other competitors in the space. 

And behind the headlines there's tremendous activity taking place across a variety of companies and jurisdictions across the US. And to just give you insight into that activity, I'd like to share a little bit of a data from the California Department of Transportation, who makes public information about the testing of autonomous vehicles on California's roads. 

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Two bar graphs side by side. The first graph shows miles driven on public roads 2017. The second graph shows miles per 1 disengagement 2017. 

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This is sample data for just a couple of companies that provide data to the state of California, and I'd like to compare and contrast the progress in autonomous testing in California over just the last couple of years. So if you look back to 2017, and you look at the number of miles driven on public roads by autonomous vehicles for these two companies, and the efficacy of their products, of their experiments in the form of how many miles the vehicle went before a human driver had to engage the vehicle. 

You see tremendous progress from the 2017 data, moving forward to the 2018 data. And then the most recent full year worth of data in 2019. And 

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Miles Driven on public roads - Company A - 2017 132,000, 2018 448,000, 2019 831,000. Company B - 2017 353,000, 2018 1,272,000, 2019 1,454,000. Miles per 1 disengagement - Company A - 2017 1,254, 2018 5,205, 2019 12,221. Company B - 2017 5,596, 2018 11,154, 2019 13,219. 

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again, significant progress in the number of miles tested. More importantly, really significant progress in the efficacy of the autonomous technology. And that really is the point here. In the case of both of these two organizations, their average miles between disengagement is over 12,000 miles which is really about the amount of miles a human driven vehicle these days goes in a full year. So really clear success and progress, both in the amount of testing and in the efficacy of the technology. 

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Title, Uncertainty impedes progress 

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If you move forward to the next slide. Before I talk about this slide, one of the things I would say to the prior slide demonstrates is don't ever bet against the technology. And if you don't believe me on that front, maybe we should just take a lesson from Horace Rackham. You might be wondering who Horace Rackham was, I'll tell you who he was in a second. But one of the things Horace Rackham said 1903 was, the horse is here to stay. The automobile is only a fad or a novelty. 

Who is Horace Rackham? Well, he happened to be President of the Michigan Savings Bank in 1903, and he was also Henry Ford's lawyer. And he advised Henry not to invest in Ford Motor Company. So if you need a lesson on whether or not to bet against the technology, Horace’s story is probably instructive. But interestingly right now, there are a number of folks who continue to take Horace’s view around the advancements of autonomous vehicles. 

In a 2020 survey conducted by the partners for Automated Vehicle Education, nearly 3/4 of respondents believe Autonomous Vehicle technology is not ready for primetime, and 20% of them were the Horace Rackham’s of the world who said it will never be safe. It's a natural human response when confronted with new technology. And because it creates unanswered questions and uncertainty. 

And in order to get the world ready for the technology, there are a number of other things that we need to address, and that's really where the conversation around insurance and a number of these other dimensions comes in. There's a lot of questions around autonomous vehicles that go beyond how effectively can the car drive itself. 

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Communication, vehicles need to be able to communicate with other vehicles, roadways, pedestrians, and passengers. 

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How will autonomous vehicles communicate? 

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Technology, complexities like bad weather and unique road conditions must be solved for. 

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How will they deal with complexities and changes in conditions? 

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Regulation, standardized regulations for vehicle safety and insurance are critical. 

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What's the legal and regulatory environment around their operation and their development? 

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Infrastructure, Roads, signs, and signals must be in appropriate condition. 

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Will infrastructure keep pace with their development? 

One of the things that autonomous vehicles do is rely on signals from the environment around them, including signs in and markers on the roads and what happens in situations where there's variability in that infrastructure. 

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Consumer receptivity, consumer acceptance and the trustworthiness of the technology are imperative to progress. 

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And last but not least, consumer receptivity that pave study illustrates. That consumers still have a ways to go in their understanding and acceptance of autonomous vehicles in autonomy in general. And a lot of that comes back to that question that I posed earlier, which is, what happens when things go wrong? 

Well, one of the things the insurance industry does is it responds in situations when things go wrong, and that really was the impetus behind the work that we did in publishing our first position paper back in 2018, that we've now updated and released just this week. 

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Text, Importantly, our position on insurance for AVs remains unchanged, if not strengthened by our learning over the last few years, 

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And while there's been tremendous progress in the development of autonomous vehicles in changes in the environment, and advancements in the technology. Our perspective on Insurance's role in the development of autonomous vehicles really remains pretty consistent. 

And so let me recap that for you here just real quickly at a high level. And these are some of the discussions that we'll get into a bit later as part of the panel. But our perspective here at Travelers is that, auto insurance and the current auto insurance structure can and will meet society's needs in an autonomous vehicle world and that is really premised on the fact that auto insurance is really the most effective and efficient way to compensate crash victims. 

And so the answer to what happens when things go wrong is having an insurance product and an insurance marketplace an insurance industry that's ready, willing, and able to respond to those events like it is today, which will benefit the advancement of the technology. And importantly our perspective on the technology is the technology will benefit society in the form of reduced crashes, reduced injuries, and fewer lives lost. 

Importantly, as we all are here in continuing to live through the environment associated with the COVID-19 pandemic, one of the things we know is miles driven on US roads is down dramatically. Sadly, crashes are not. Crashes and fatalities on US roads--no, I'm sorry not crashes, but fatalities on US roads are actually up through the first three quarters of this year, despite the dramatic drop in mileage. So losing lives on America's roads is not an issue that's gone, it's an issue that's here. It's an issue that's important. And the safety benefits of this technology over time, we believe, are worth investing in and worth supporting. 

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Text: The current auto insurance structure can and will meet society’s needs in an AV world. It is the most effective way to compensate crash victims. AVs ultimately will benefit society by reducing the number of crashes, injuries and lives lost. Insurers have processes in place today – like subrogation – that will help in the transition to insuring AVs. There is already a market today in the commercial insurance sector for AV risks. Any AV legal or regulatory structure put forth must include insurance-specific policies. The insurance industry should play a central role in policymaking and stakeholder discussions. 

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We can talk in more detail later about some of the processes in place that exist inside the insurance industry, like subrogation. We can talk about the involvement of the insurance industry, not just in a world where autonomous vehicles are a fixture on America's roads more broadly. But that there's a role for insurers to play today in the support of the development of technology, and we can talk about Travelers role in that. 

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There is already a market today in the commercial insurance sector for AV risks. Any AV legal or regulatory structure put forth must include insurance-specific policies. The insurance industry should play a central role in policymaking and stakeholder discussions. 

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But the point is that, insurance can be a solution to help enable the development of autonomous vehicle technology. It can be a solution to help in advancing the technology and advancing progress, because it is part of that environment that needs to evolve in support of the technology and in support of the safety advancements that autonomous vehicles promise for us in the future. 

We look forward to continuing to be part of those discussions. Today, certainly as is one of those opportunities. I want to thank Joan and the Travelers Institute for bringing this forum together and bringing all of you here to participate in this discussion. Looking forward to being part of it. And with that, I will turn it back over to Joan. 

OK. Michael, that was terrific. Thank you so much for that quick overview. We are going to now introduce Dr. Rosekind from Zoox. And Dr. Rosekind, are you with--oh, there you are. Thank you so much for joining us. We're so thrilled to have you. I want to do a proper introduction. I briefly mentioned at the top of the program that you are the Chief Safety Innovation Officer at Zoox. But you also served as a distinguished policy scholar at the Department of Health Policy and Management at Johns Hopkins Bloomberg School of Public Health. 

Dr. Rosekind was previously Administrator of the National Highway Traffic Safety Administration, or NHFSA appointed by President Obama. He has served as a member of the National Transportation Safety Board, the NTSB as well. His background is in human factors, having worked as a researcher for NASA. He also earned a PhD in psychology from Yale. Dr. Rosekind, welcome again. Thank you for joining us. 

And let's start at the beginning. I have a number of questions for you so hopefully they're not going to be too hard. But your team sent us a terrific video, about a minute and a half long. And we wanted to go ahead and play that video now to give our audience a sense of what is Zoox. 

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A person wearing a backpack scrolls down their mobile phone as they stand in a darkened space. A square vehicle with clear doors in the middle of the side panel moves across the space. Purple light flows over the vehicle. Square headlights in white illuminate the dark. The person stands still. Red lights illuminate the headlights and a strip across the top of the vehicle. The woman looks up and opens her eyes. Text, Fully autonomous. All-electric. The woman presses a lighted button on the side of the vehicle. Double door slides open revealing a row of seats facing each other. She steps into the vehicle, places her backpack on the seat, sits down, and buckles the seatbelt. A lightening bolt appears on the screen of her mobile phone. The doors to the vehicle slide shut. The woman presses a button on a panel located on the wall beside her. text, Built for riders. Not Drivers. Zoox. The Zoox vehicles spins around in a circle and then drives away. 

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I love that video. 

It's terrific. So tell us your mission, tell us about Zoox. Give us the overview. 

Well, I think one of the--and what you just saw in the video is that, Zoox is actually pretty unique because we went big and bold. We went after basically three big aspects of autonomous vehicles. Build a vehicle from the ground up, and that's what we just released in December 14. We're showing the world what that vehicle looks like. 

Second, we're actually building the artificial intelligence. The computer stack that's going to actually provide the brainpower for autonomous vehicles operating on our roads. And third, we plan to actually operate the fleet. So the vehicle, the AI, and operating the fleet. Which means, if you think about it, we really believe an integrated system is critical to make this reach the benefits we know that are out there. A lot of opportunity, how do we actually get there? 

So what you saw there, it takes five or six years to build any new vehicle. And so we've been at this for six years, and what you saw there was our December reveal showing the vehicle. And you see how different it is from what's out there on the road. And I'm sure you'll have questions; I'll just make a couple of really quick points. Why built from the ground up? Well, it allows you to do things like put the sensors where they need to be, rather than retrofit a vehicle that's meant for a driver in the left seat. And most of us see these vehicles on the road with a big liter in the middle of the roof. Instead, we get to put our sensors on every corner, 270 degrees of vision basically on every corner of our vehicle. Kinda of amazing. 

And the other thing, I'm sure we'll talk about it. But my title Chief Safety Innovation Officer is because, we're really trying to innovate in the safety area as much as we are in all these cool technology areas. So we have over 100 safety innovations built into this vehicle that don't exist on vehicles today. So Zoox is pretty unique. Basically, and taking on all three of those big opportunities. But we think that's the way if you really want to reach the opportunities that are out there, you're going to need this integrated system. 

Wow, really groundbreaking stuff, amazing. Thank you for that. So you've described this new vehicle as a robotaxi. Is the world's first ground up purpose built autonomous electric vehicle. So can you tease out some of those components for us, and why are each important? 

So some of the core things which are just portrayed, which is really great for us to highlight. Our vehicle is built for riders. And so one of the things you notice, there's carriage seating, we're going old school here. When you get rid of the driver in that left front seat, you get to think about what's comfortable for riders? So you have carriage seating, it's all electric, is bidirectional. 

And I always tell people, get your head around that. What that means is there's no front or back. When it pulls into a parking place, when it pulls out again, it's not going in reverse, it's going forward again. So this is built as a robotaxi for congested urban cities, just think what that means to maneuver in a city. And even things like the sliding doors that you saw. I mean, you're never going to open a door into traffic, for example. It's only going to be sliding on a curbside. And so building from the ground up gives us so many opportunities to totally rethink and re-imagine what transportation should look like. 

And I'll just put it out here now, autonomous vehicles offer this trifecta. Enhancing safety, mobility, and sustainability for our planet. And I think the challenge for everybody in this arena is trying to figure out how you maximize the benefits in every one of those areas. 

Thank you for that. And you mentioned safety. So safety innovation is really an important concept. As Michael said, over 36,000 people died on US roads last year. So let's talk about safety in the context of AVs. Give us an example of a safety innovation at Zoox. 

You bet. And I'll tell you as administrator, I really tried to get everyone in our agency to know the actual number. And just so you got it, for 2019, it was 36,096 lives. And the reason I did that is because that's not just a number, those are people. Those are fathers and mothers and sisters and brothers, every one of those is a life. That's 100 people a day that we're losing on our roadways. And we could spend all our time just talking about that. 

But I mean, the most dangerous thing our kids can do is be in a vehicle on the road. It's just like the number one cause of death for young people. I mean, the safety opportunity is unbelievable. And so to your question, just to give you three quick examples of what we can do with safety innovation in a ground up built vehicle, we actually got to rethink what an airbag is how it's designed. So you know the first thing that a crash that could kill you is that steering wheel in front of you. That's why the airbag is there. 

And again, I was administrator when we did the Takata recall, because even that airbag can be dangerous to you. Well, if you have the carriage seating, we got to reimagine what an airbag design should look like. So and it's on our website at zoox.com, if people want to see it now. But it basically has two airbags. First it's a curtain airbag that comes down from the ceiling, and basically provides a curtain for each side, so there's two of them. So each side is protected. 

So by the way, that means things flying around in a cabin or other, that's going to keep you safe. And then there's a second airbag just for you, each individual passenger that cushions head, neck, chest, et cetera. And so it's pretty neat. It's on the website to see it. But it's a totally new and different design. 

A second thing we could do only because we built from the ground up is most people don't realize but they're actually different crash standards for the front seat versus the back seat. Again, driver and passengers in the front seat higher level crashworthiness. And you think about it, right now in ride sharing ride hailing, pretty much everybody's getting in the back seat, which means there's actually less crash protection than when you're in the front seat. 

So we have carriage seating and we've been able to design our vehicle to have front seat level crash standard worthiness for all seats in the vehicle. Everyone gets the same level of crash protection from the seats as--right, everybody. You can't do that unless you build it from--you can't really retrofit that another vehicle, you only get that if you build from the ground up. 

A third one I'll just tell you, 91% of people wear their seatbelts in our country now. And yet, in crashes where people die, 51% of the people who actually lose their lives were not wearing their seatbelt. And so in a Zoox vehicle when you get in, the ride won't start until everybody's buckled up. OK, so those are just three examples of things that we've been able to safety innovations, we've been able to build in this vehicle and its operation, again from the ground up. 

That really is fantastic. But how do you--I mean, I'm going to press you on this. How do you respond to those skepticism and skeptics out there about safety in AVs, because people are worried about this? 

Absolutely. I think Michael brought it up. People are doing all kinds of surveys. How many people would take a ride in an AV? Do they think they're safe? So what I point out is we need at least three things for people to start feeling comfortable, for riders, for consumers. We need more data that shows they're safe. We need transparency so people see that data, and third we need experience. And that's where we have a challenge. 

Because right now, people like to talk about as if these AVs are truly autonomous vehicle, no driver out on the road. But they're not really. There are some pilot programs that are out there, and some initial small services that are starting. And the example I like to give is if I'd asked you over 12 years ago, would you buy a phone you'd put in your pocket? 

Over 12 years ago, that's before the iPhone existed. And if I did a survey and said, would you buy a phone you could put it, maybe two of them. One for work and one for personal. And by the way, you'll use it a lot for texting. And you would say, what's a text? Oh, that's an app. What's an app? 12 years ago we had no sense of the world we live in now of what smartphones have done for us, right? 

And I keep telling people, it's the same thing with AVs. When we're asking people, would you take a ride? What's it going to mean to be safe? We're asking people to give us judgments for things that don't exist yet. And so until we've got the data, we make that data transparent to people and then three, folks actually get an opportunity to experience it. I can just tell; I haven't been in many both as administrator at Zoox. After about 30 seconds or a minute, you want to know what else--it's like can I read now? Can I get out my--it's like that's what you want. Most people will tell you after about a minute, it's boring. 

And that's how it should be. But you won't know that until you experience it. So until these are more widespread and people have firsthand knowledge it's like, oh yeah, that was boring, no big deal. I actually got a lot of work done, listen to music. It's going to be hard for people to actually say, I think it's great, because until it's real. And they have a chance to experience it, it's hard for people to rate that. Just like the iPhone over a dozen years ago. 

No, I think that's a great analogy with an iPhone, because you're right. We didn't know what a text or an app was. So that's a great analogy. Thank you for that. So we see how the technology is advanced. Let's think beyond technology. And what in your view, what are other milestones like infrastructure or public support or regulation do you see as being critical for expanding deployment on public roads? So widespread deployment, because we know the technology is there obviously. 

Well, and I think Michael's slide was great. I mean, he really he nailed it with all those things, which you just mentioned as well. We've got infrastructure and we can't just fill potholes; we've got to think smart infrastructure so that signals and everything else are actually talking. And not just the vehicles, but all road users. Pedestrians, bicyclists, motorcyclists, everybody should have a chance to communicate. So you know where people are in speed and if there are problems. 

Infrastructure: smart infrastructure is going to be important. All the communication stuff was there. Regulation, I think what's interesting about that is there isn't anything specific that is a barrier for AI, for the Artificial Intelligence side of this. But it's more interesting when you get to design right the vehicle that you saw from us, it really is the future. Standardization, insurance was mentioned. 

I think the consumer trust is a big issue. And I think core to your question is, to really see the scale to see these move up to being just everywhere and comfortable and helping us meet the opportunity for the benefits of more safety and mobility and sustainability, we're going to need all of those things. And by the way, I think that's why your question so important is because, people think, oh, if we can just figure out and solve the technical problem, here they come. No, it's more difficult than that. But lately, I've been saying I think some of the biggest challenges are in cities. Just figuring out how to actually deploy these with all the questions you just talked about. 

Great. And actually let's bring Michael back into the conversation, Michael. So can you talk to us about Travelers does have experience in ensuring an underwriting in the commercial area, the AV industry. So enabling that innovation and underwriting AVs, what value does this provide in the larger AV context or personal lines and/or, what have we learned at Travelers so far? 

Sure. And it's interesting Dr. Rosekind talked about they've been at it for five or six years. We've been at the insurance space on the prospect of insuring companies involved in this space for about the same amount of time. And it is a learning experience. Right, so part of the value for a company like Travelers, insuring companies who are in the commercial development of autonomy is we learn the technology, we learn the challenges, we learn the issues alongside the companies doing the development. 

And then, well Dr. Rosekind, I think, is in a pretty unique position given his experience and his history of coming from the safety side. And Dr, your title of safety and innovation combined, we love it from an insurance perspective. But that's not necessarily the way every company in the space approaches this, let's just say. 

I'm the only-- just so you know, I'm the only one with that title. 

You're the only one I've heard of. I wasn't sure if you were literally unique, one and only a unicorn, if you will. But for us, that's really important. To bring the safety perspective in the risk management perspective to the conversation alongside the innovation, I actually think helps with the need for the infrastructure and the environment to adapt to the technology and helps facilitate the technologists and the innovators understanding how they need to adapt to the environment. So it's actually been a really great partnership. And I think to the benefit of the advancement of the technology and the capability broadly. 

And if I could add just a comment, we've partnered with folks in the insurance and, I think, what you just said is critical right, is we're all in a learning phase right now. And again, great benefits are out there in the future. But how do we get there in a positive way? And the other thing, I think, for both of you to be thinking about is, often people just think about that fully autonomous vehicle. Right now, which is what's called a level four, level, five. 

But right now, we have people at level two, people trying to achieve level three, which still involves a human engaged what's going on. And so again, I think partnership with your industry is critical right now. Because if we want to see these benefits of saving lives preventing crashes, we can't wait. You know, we got to start doing that now with the current technology, and that's going to require these partnerships as well. 

Well, and every one of those levels presents different risks, right? Because there are different capabilities, they're deployed differently. And then the interplay between those levels on the road presents a whole set of risks that we need to sort through. So absolutely, totally agree. 

All right. So I imagine a bunch of people on our call today are going to be wondering when is this technology coming to my city? And so, Dr. Rosekind, can you share your thoughts on how AV technology, how soon will this be deployed in reality? I know you're working on the very early stages, but just the rollout of after five years you say at your company. This is this is upon us, correct? 

Yes, and I think what's really important about your question is take the long view. So even as administrator, some years ago when people say so where does this technology on the road? Well, some of it's already there. You know, in fact, most people don't even know how much technology is. And there's other surveys that show what's in your car? People don't even know. They have different names, et cetera. But there's level two stuff, adaptive cruise control and blind spot monitoring, and lane keeping, and automatic emergency braking. There's all kinds of technology that's already there. 

So at one end, we can say some of this technology to save lives and some of that's already here. When you look to a fully autonomous, no driver anymore. No safety driver, no driver. I think you're probably looking at seeing that starting to be more visible, where people have literally more opportunities to experience it. That will be in the next three to five years. When is it going to be that any of us could probably walk out of our building, get out the app and get one of those robotaxis? That could be 20 to 30 years till we see it at scale. 

And if you think about it, that just makes sense because of how large the world is. In fact, if you have one new technology like a new regulation that says you've got to have backup cameras, it can take 15 years to fully get that technology integrated into the 265 million cars we have on US roads. So when you think about actually changing the whole system like to fully autonomous, again you're looking at least 20 or 30 years probably. 

OK. All right, so our kids and our grandkids. Can you just give us a sense, describe the experience of someone who sits in your Zoox AV for the first, time what does that feel like? You say they get bored, and it's just boring after a while. Boring is good in our industry, we like boring. But what does it feel like for the first time when you're in that AV? 

So I love that question. And just so you know, almost nobody ever asks that. Because I got to tell you, that first minute or so before you get bored, it's just like you're sitting in the future. I mean, you get in--I'm just going to the Zoox vehicle. And I've been in it with four people, including doing demos for folks who have never been in an AV before. And you put the buckle on, they're like, oh, there's no steering wheel, there's no driver. And then it starts. 

And they're sitting there going, oh my God, and you can look out the windows. Things are going by and you're just sitting. So I think the amazement and excitement about the fact that you're literally sitting in the future of what this could be. And so there's always a conversation about, wow, this is amazing. And look at that and here's a question. And then in about a minute when you've now gone to just a regular conversation with people in any vehicle, someone will stop and say, oh, I'm not paying attention anymore, it's just doing its thing. 

And by then it's already done a big loop or it's taking you on a big trip already and you realizing, I haven't been--it's so comfortable, it's so regular that you're not paying attention after a while. And that's where the, my favorite question what people get out of a ride is, so how was it? And the choice answer is well, that was boring. 

Right. 

Yeah. And that includes, by the way, the vehicle you saw is not on public roads yet, OK? But we test the software in vehicles that are on public roads with safety drivers in there. And those vehicles, you can get on the web our website and others, and literally see us driving in San Francisco down Lombard Street, right, the crooked street. It's like--and so same thing, people in that case, there are two safety drivers in the front, and you're sitting in the back seat. 

But at the same thing people are just like, their hands are on the wheel. They're right near the wheel for safety but the reality is, the vehicle is just what an amazing ride. And those are even, I would say a little more amazing in a different way, because you're in a city actually seeing the vehicle drive itself. And that's why you do that and you get in the new vehicle, which again is more constrained right now. And when you see those two, you realize that putting those together, you're sitting in the future. 

So I'm a follow up on that question, then Michael we're going to go to insurance in a second here. But what's the coolest feature in your opinion of your Zoox vehicles right now? What's your coolest feature? I mean, I love the airbags and the curtains, and I love the automatic seatbelts. But what in your view is the coolest? 

Well, it's the classic question, which one of your children is your favorite? And so I will just say from a safety innovation point, I've got to tell you we announced that, like I said, we have over 100 safety innovations built in. I am just excited about what that means for safety. We keep talking about it. We can ground you in 100 realities of how that will be different. 

And so I think of the safety innovation point, every one of them gets me excited. Because there's no one safety thing that's going to save all those lives. You need the whole system, so I'm really excited about that. And the vehicle itself is pretty amazing. So even there, I just take your pick bidirectional. There's nothing on the road like that. And it's got four-wheel steering and air suspension. It's just as the kids would say, it's super cool. 

All right, I'll leave it at that. 

Like you said, people get in, they're wondering where the driver is, where the steering wheel is, which end is the front, right? I mean-- 

So Michael, talking about cool things in cars, these are costly, right? So how these new technologies affect the cost of vehicles and repairs and claims, and let's look around the corner and see into the future, what are your thoughts regarding those? 

Sure. So I would say a couple of things. First, I would step back and say, again, our view and I think broadly you know subscribe to is that autonomy will improve safety. Fact of the matter is autonomy is improving safety. Dr. Rosekind talked about automatic emergency braking, that is probably the single most important advancement in safety and vehicles in a long, long time. And the fact that it will be a standard equipment on 99% of new vehicles delivered in the United States by 2022 is probably the most important development on road safety that we've seen certainly in my career in insurance. 

And so the good news is as technology improves safety, it will likely reduce the number of and the severity of crashes. The speed at which crashes happen, the number of injuries associated with them, the challenge is that technology is expensive. And replacing the side mirror on a standard sedan today cost twice as much as it did prior to a lot of the safety technology, because the blind spot monitor is now in the mirror. 

Replacing the bumper on most vehicles today is significantly more expensive than it was 5 or 10 years ago, because there are sensors and/or cameras in and around the bumper. And so you've got to replace the bumper, you've got to replace the camera, you've got to calibrate the bumper right back to Dutch Rosekind’s analogy on the iPhone. Nobody would have known what calibrate a bumper meant 15 years ago. 

And so there is that aspect of it. I have to say one of the things I'm really encouraged by seeing and learning more about the Zoox design is Dr. your comment about you put things where it makes sense. So you don't have to put the sensors in the bumper, you don't have to put the cameras in the side view mirror, you can put them up high where they're less likely to be damaged in the event of an accident. 

So I think that solutions like the Zoox vehicle could actually even mitigate some of that cost to repair some of the technical components of these vehicles if we can find different ways to place the technology in their vehicle. But in the short term, the way most advanced safety features are being built and installed in the existing fleet today does raise the cost to repair and replace vehicles in the near term. 

OK, great. 

If I could just--I think Michael is right on target with this, which is you're going to have new technology and new procedures that have to ensure the safety benefit you get is not in some way impaired literally, because you didn't calibrate it correctly or you didn't put the right camera in or it's in the wrong spot. And the other thing which Michael brings up I think is pretty important is that, again, this is one thing if you're talking about a fully autonomous vehicle. 

We're in this moment, as we were just saying, where you've got level two, level three adaptive cruise control, automatic emergency braking, et cetera, where we've got all kinds of technology that's already on the road. If you want that safety benefit, it's got to function correctly. 

Well, to your point earlier Dr. A lot of times, people don't even know the technology that's in their vehicle and/or they disable it, and so you lose the benefit. And so there's just so much variability in the system today that we need to assess and manage and deal with. 

And the last part I was just going to say is, especially from the insurance community, if you think about it, the Zoox is one model robotaxi. There are still people that are thinking about selling this to you as an individual vehicle for you to drive it, right? 

That's right. 

Trucks are being used. The whole first and last model last mile for shuttles and things. So there's so delivery packages not even people involved. There's so many different models here that are going to need to be protected, covered, repaired correctly, et cetera, that I think raised not just challenges, but opportunities for all of us right, to make sure the system meets its greatest benefit. 

Well, and you made the comment earlier about your business model being an integrated system. And then you talked about the other components of the environment that need to be there to support the transportation system. And I think the same can be said for the legal regulatory and insurance system that surrounds this whole ecosystem. There's not a one size fits all solution to any of it, it's got to be an integrated approach that connects a number of different capabilities to make it work. 

And I've got to just say thank you for mentioning the AEB, the Automatic Emergency Braking. Because that's something we did by challenging the industry, can you make AEB standard on all your vehicles by 2000--it beat regulation by at least four or five years. And I said, you can count lives saved, crashes prevented by having it happen that way. So to your point, there's no one size fits all, we're going to have to be really creative in s out how all these pieces come together, so we get the maximum benefit. 

Yes. 

OK. We are going to open it up to questions from the audience. We have a lot coming in, so keep them coming on the Q&A function. And I have a couple, let's just try to rapid fire them here. Dr. Rosekind, first from Cormac McCarthy, how are we going to change public opinion and perception around autonomous vehicles? 

So lightning round will make these really quick. I think trust is critical and the thing I mentioned previously, is really important. We need data and transparency, but we need people to have experience with the technology, so they get comfortable and trust what's coming. 

OK, another one coming in from Ron Mancini. Dr. Rosekind, how safe will autonomous vehicles be in a bicycle and pedestrian world, will technology protect those vulnerable users? 

We have to make sure all road users are protected. And why that's such a great question is, pedestrian protection big in Europe, not as big in the United States, that has to be part of the safety case that gets presented for autonomous vehicles. All road users need to be protected. And the last thing I just say, what's interesting about that is how we get fully autonomous vehicles communicating with all those other road users. We're used to doing that I did the driver see me is it OK for me to cross? What do you do when there's no eyes to connect him? So that raises other issues, but it's got to be part of the solution. 

OK, great. Michael, one from James Venezia at Phoenix insurance. How will we determine whether or not a claim should be paid as a product liability on the manufacturer or auto liability on the owner? 

Yeah, it's a great question. It's one of the seminar questions in this space. And I would say the short answer is, the good news is if you use insurance as the mechanism to figure out what to do when something goes wrong, you don't have to decide that and you probably can't, given the conversation we just had categorically. It's going to be a decision based on the facts and circumstances in the event. 

And insurance does that today. Insurance pays for the industries, pays to get the car fixed, and sorts out the fault on the back end. You don't have to wait for a determination of that to get your doctor bill paid and you get your car fixed and get back on the road. But it really is going to be dependent upon the facts in the circumstances in this situation. And 

Dr. Rosekind's description of the iPhone and trying to imagine what that world looks like 12 years ahead of time, we haven't even thought through some of those scenarios yet. Right, I mean, the one that we've talked about, that's an example which is not the Zoox model. This is more in the model of have an autonomous vehicle that you own. 

And so you're in it and something happens but it turns out that it was because maintenance was delayed on some component of the vehicle, whose fault is that? Is it your fault because you didn't take it in when you were supposed to? Is it the manufacturer's fault? Is it that--so the questions that you get into as to whose fault it is are extremely complicated. And again, case sensitive. So there is no one answer to it, which is why we need an integrated system to be operational to support it. 

Great. I am going to thank Dr. Rosekind. Michael can you stay with us for a few more insurance related questions? We have a lot coming in. Is that OK, if you have a few more minutes, Michael? 

You said we like boring, so I guess I should stay. Dr. Rosekind, can I thank you so much? We know you had a hard stop here at quarter until the hour. So we are going to respect that and let you go, we're so grateful to you for joining us. Please come back, come back later this year and talk to us about your progress. But congratulations and thank you for your public service in the safety field. We certainly want to be a partner with you going forward. So we really appreciate you joining us today. And Michael, you're going to stick around, right? 

Sounds good. Thank you, Dr. 

Thank you, I enjoyed the conversation. 

Same here. 

Take care. So Michael, we have a few more questions coming in. We have a lot of independent insurance agents and brokers joining us today. Now, what is your advice to them in terms of business impact and opportunities over the next few years? Because you did say there's real opportunities here for our industry? 

Yeah great question, Joan. And again, the first thing I would say, which I've said and a number of my colleagues on the phone have been saying for a while is, first and foremost don't bet against the technology right. It's not going to happen overnight, but it is going to happen. And autonomy is progressing as Dr. Rosekind already said, it's already here. 

And so what advice that I would give is invest, educate yourself, try to understand it. If you're in the commercial insurance space, look for the opportunities to provide insurance to the companies in this space. And they're not just Zoox owned by Amazon, there are component manufacturers. There are computer artificial intelligence organizations that help support testing. I mean, there's all kinds of companies and organizations engaged in this space commercially. And then the other thing I would say is, learn about the advanced safety technologies that exist today as well. 

So that when your personal lines insured comes to you and is looking for perspective and advice on what vehicle to purchase, right, and they're looking to purchase a vehicle for their child who just got a driver's license, for example, and they're looking for advice on what's safest. Understanding these advanced safety features and where they are and which vehicles with which manufacturer, you can really be a good, trusted advisor to your insured and helping them navigate this. 

OK, great. Another question here from Bill Stone of Google. How will Travelers compete and transform at speed and scale as automakers themselves start to self-insure? So we've seen a lot of different automakers talk about this and manufacturers. And Michael I know our whole industry is looking at that saying, can they do this themselves? And will consumers adopt their own insurance through the manufacturer? 

Sure. Great question. And again, it comes back a little bit to my point in our perspective, which really is in the position paper. That there is no one size fits all solution here. The one thing we're pretty convinced of is product liability is not the solution. And waiting for a determination on whether it was the manufacturer's fault that caused an accident isn't the right answer. 

And so we certainly see and hear and are in conversations with auto manufacturers around their perspective, on insurance and risk management in this space, and they certainly need to make their decisions around what insurance coverage they need to have and what insurance products they may want to offer. But from our perspective, the best solution is sufficient coverage at the vehicle level maintained by the owner, that's really the nuts and bolts of our recommendation and our solution. 

And so you know you take that example, and you say, OK, well what does that mean for Zoox. Well, that means for Zoox is, if they own and operate a fleet of autonomous vehicles, our position would be they should be responsible for that insurance at that vehicle level, right? Whereas if it's the fully autonomous vehicle that you or I own, we should be responsible for that insurance at that vehicle level. 

Got it. OK, great. Keep them coming, folks. Michael has a few more minutes. So Michael, how do you contemplate record and/or analyze the immense amount of data that will be collected from these AVs? And when we collect this data and it will share with us, what are the impact on rates? Of course, it's always hard to talk about rates in the future 10 to 20 years from now. But he did say crashes will be down, so fatalities down. And how do we think about this immense amount of data we're going to be getting from these companies? 

Yeah, I mean I think it's another key component that we agree needs to be addressed. What are data rights, who owns the data, who has access to it, who has access to which data. I think the ability to consume and analyze it is frankly an issue and a challenge we're already dealing with. We and many others have efforts underway with connected car, with telematics. Our IntelliDrive (registered trademark) 2.0 program, where we're gathering data on driving behavior is a very similar construct to gathering data around the operation of a vehicle. 

That said, today we collect that data and analyze data on some very discrete set of behaviors, which is only a small subset of the potential data that would be available coming straight out of a vehicle. And so having the computing power and the analytic capability to be able to evaluate and assess, that is a significant challenge. But it's one that we and many others in the industry are already focused on. 

OK. It looks like someone, some smart agent out there read our paper already Michael, that we put out a couple of days ago. And they're asking us, how would-- so obviously we're state regulated, and the federal government is putting out guidance they did over Christmas, there was some new guidance that came out. But we're calling for a model state regulatory, process. And what would that look like and what do we mean by that? 

Sure. No, it's a great question. And what I would say, and Joan and you alluded to the roundtable that you and I both participated with Secretary of Transportation a couple of years ago. In that conversation, we really had two discussions about regulation and environment. One was regulation around development and testing and safety standards, which historically has been more the purview of the federal government and the Federal Department of Transportation. 

And then that probably is and the regulations that came out in December were federal and really were around that. What are the requirements? What are the standards for autonomous vehicles from a manufacturing standpoint? Our perspective on the onus being on the states is more around the operation of the vehicles. And financial responsibility laws and traffic laws and auto liability claims, those are all really adjudicated in the jurisdiction of state regulators and state courts. 

And so from our perspective, really the insurance side of things from a vehicle operations standpoint, we really think is the purview of the states and is something that we should be working with state regulators on, I hope that clarifies it. 

Yeah, that's excellent. Let's go for this question here. For insurers, how are you going to deal with potential accumulation risk and potential liability risk? Does that require you to completely change your risk appetite? Also, alongside Travelers who are said to be winners from the disruption of the insurance industry. Well, let's not pick winners and losers. But I guess changing our risk appetite is a good question. 

It is a good question. And I think it's another one that falls into the category of the landscape is going to evolve. We as an underwriter, whether we're talking about commercial liability or personal auto liability need to be thinking about aggregation of exposure, need to be thinking about scenarios where we can get a significant volume of claims in one space or another. 

And I think we will and do today and we'll need to continue to think that through when we think about our underwriting appetite, what classes of business are we interested in underwriting? What types of companies on the commercial side are we focused on underwriting? It is interesting in Dr. Rosekind alluded to it. He talked about a lot of different applications of autonomy. 

And the insurance risk and the insurance exposure presented by Zoox, who is planning to build and operate a fleet of autonomous shuttles is going to be different from the exposure presented by somebody who's planning to manufacture vehicles that have significant autonomy for individual use. And then there's going to be variations on that theme in between and as both a personal lines underwriter and commercial lines underwriter, we'll make decisions about the risk reward tradeoffs in all of those different scenarios. 

Great. OK, another unique question coming in, so I thought I'd take it. I love my new Tesla and it just got quoted with Travelers. Thank you, Michael Klein. Thanks for the great rate, and she lays out the rate we gave her finally a carrier that understands just how much safer these vehicles are. So again, a shout out. But it's a real question underlying that, Michael. Are most insurers writing these semi-autonomous vehicles now and will appetite grow obviously the agent community is very, very interested in this as well? 

Yeah, absolutely. I mean, I think we again, hopefully it's come through and in my comments throughout the session today. We are big advocates of advanced safety features in vehicles. And we've got perspective on which features we think have the most impact. But one of the things that is clear to us is that over time, the vehicle itself is making a bigger difference in the risk profile for an individual than maybe it did in the past. Because there are so many differences now in the level of safety built into a vehicle. 

And by the way, even the same model of vehicle right. Different trim levels of a Honda Accord are going to have very different safety features. And so understanding the safety features in a vehicle, I think, is going to become more important as we go forward and certainly something that we're spending a lot of time focusing on I know a number of carriers in the industry are. But we are trying to reward and recognize safer drivers and safer vehicles over time. 

Great. Well, we are going to leave it at that. But a couple of questions have come in Michael, about the replay for this webinar and all this great content, and where to find our white paper. So I'll just address that. We will have a replay we will send you the link. Everyone who's on this call or who registered, you'll get a link to the replay within a few days. And our white paper is on the website travelersinstitute.org. 

I want to close this session before I thank Michael, and all of his comments with a couple of our upcoming webinars. 

(DESCRIPTION) 
Text, Wednesdays with Woodward, a webinar series. On the Horizon: The Future of Autonomous Vehicles. Travelers Institute. Travelers. American Property Casualty Insurance Association. Insuring America. A P C I dot org. 

(SPEECH) 
But actually, let me thank you now Michael, because it really was amazing to hear your thoughts as an industry leader about how insurability of AVs will happen in the future. And again, clearly, you've thought a lot about this with your team and Travelers, and it really does show. We are thrilled that you're with us today. We know you're going to keep watch on this for us. And as policymakers and regulators come to you and the leadership team with questions, I'm sure will be very helpful as we can and helping them craft those regulations. So thank you for your leadership, Michael. 

Well, and Joan I'd really like to thank the whole Travelers team for all the work on the paper, on this event, on the work that we continue to do in this space. And I want to thank you for the opportunity. Dr. Rosekind talked about the importance of trust, data, transparency, and experience in furthering the cause here. And I think today was a great step in that direction. And really appreciate your giving us the opportunity to be part of it. So thank you very much. 

(DESCRIPTION) 
Upcoming Webinars: February 3 - Geopolitics and Global Hot Spots for the New Administration. February 10 - iGen at Work: Understanding Risk-taking, Motivation, and More Across Generations. February 17 - Meeting the Moment - The Changing Face of Insurance Distribution. March 3 - Crash and Learn: An Inside Look at the Insurance Institute for Highway Safety. March 17 - Are You Recruiting Military Spouses Yet? Travelers Institute dot org. 

(SPEECH) 
All right, thank you, Michael. So folks out there, next Wednesday, February the 3, we're going to welcome US Navy Admiral, Michael Rogers for a tour around the world looking at global hot spots for the Biden administration. So not insurance, we've only probably say the word insurance. But we wanted to bring you these expert speakers as the economy and the new administration everything is very fragile right now in the world and we felt the obligation as a public policy think tank to branch out a bit and give you perspectives from different areas around the world. 

So Mike Rogers, former Navy Admiral, been in the situation room more times than he can count. I asked him the other day about that and testified before Congress, many hundreds of times. So join me next Wednesday. And then, on February 17, we're going to welcome Patrick Kinney, who's Travelers’ EVP for field management to discuss the evolving distribution strategies in the insurance industry and ongoing consolidation. So we will save the word insurance in that webinar many times, for all our agent broker partners that will be one not to miss. 

And then a March 3, we have a program for the Insurance Institute for Highway Safety or IIHS, where we have a Dr. David Harkey talking about crash testing, and what's ahead in an auto safety for them. So all of these programs are on our website. The replays are available travelersinstitute.org or you can send a message to me on LinkedIn and stay connected. So thank you again for joining us today. Thank you for your friendship out there and business partners. We really do appreciate it. And again, stay safe wear your mask and we'll see you next Wednesday all. Thanks again. Thank you, Michael.