Autonomous Vehicles Israeli Perspective Peggy Sharon, ADV Levitan, Sharon & CO AIDA World Congress, Rio de Janeiro, October 2018

Autonomous Vehicles Levels

Autonomous Vehicle Readiness KPMG REPORT : Autonomous Vehicle Readiness Index (Jan 2018) top ranking countries: The Netherlands Singapore US Sweden UK

Recent Features With AV Technology South Australia begins trials of FLEX autonomous shuttle bus (June 2018). Low-speed shuttle services - pilot programs in Texas (Drive.ai – Aug 2018), Florida and California (Voyage – June 2018).

Ford’s fully autonomous vehicle (level 4) expected by 2021 Future concepts Honda, Toyota and Hyundai – self driving on the highway (level 3) by 2020 Ford’s fully autonomous vehicle (level 4) expected by 2021 Volvo aims to replace short haul flights with 360c that drives while you sleep

AV Difficulties Volvo: Unable to detect kangaroos ‘Bad’, unpredictable driving and jaywalking

Israeli Perspective

Israeli Innovations “car manufacturing is not about tires or brakes anymore, but the technology inside the car – the sensors and algorithms.” Waze – car navigation system. Mobileye - system for avoiding collisions and keeping vehicles in lane. WayCare – predict and update traffic jams. Argus – car cybersecurity system. Karamba – car cybersecurity system. Autotalks – communication between autonomous vehicles (V2X technology pioneer) Otonomo – system for sharing car created data to 3rd parties

AV Testing and Development in Israel BMW, Ford, General Motors, Honda, Uber, Volkswagen and Volvo have been investing in Israeli technology since 2016. Israel’s Main challenges: Driver obedience to rules and regulation Road infrastructure However, numerous AV testing projects expected to launch in the near future:

Ashdod – The Planned First Driverless City GM, Mobileye working on Israel’s first driverless city. Additional car manufacturers applied for permits to carry out trials. Ashdod port – part of the Autonomous revolution

AV Testing and Development in Israel (cont.) October 2017 - Israel opens a segment of highway for autonomous cars near Shefayim. Novemebr 2017 –Mercedez-Benz opens R&D center in Tel Aviv for development of CASE strategy (connected, autonomous, shared & services, electric). Plans to open an AV test center in Netanya. June 2018 - The Ministry of Transport and the Israel Innovation Authority announced the opening of tender for smart transportation trials.

AV Accidents and Results

Recent AV Accidents and Results May 2018 - Mobileye’s Self-Driving Car Runs Red Light in Jerusalem. No pedestrians or other vehicles were hurt.

AV Accidents and Results (cont.) May 2018 – Google’s Waymo self-driving vehicle involved in Arizona crash. September 2018 - A self-driving car owned by Apple was involved in an accident.

Liability

Suitable Liability Regime? Future vision – less accidents but the accidents will be More expensive and deadly then now. Different kinds of accidents.

Product Liability Negligence and Probability Tests or utility-cost test. Strict product liability. Types of defects: Manufacturing or Production Flaw, Design Defect, Defective Warnings or Instructions. Interaction between man and computer (software) until full automation.

Who will be considered as a “driver” in a “smart car”? The manufacturer? The person who planned the automatic system? The person who entered the car?

Insurance And Regulation In Israel Distinction between bodily injury and property damage: bodily injury – no fault system no change required. property damage – based on driver’s negligence new rules required. No regulatory progress yet in the field of autonomous vehicles.

Expected Changes in Insurance and Regulation

Insurance Industry in General - Prediction The size of the automobile insurance pie will likely shrink - estimation of 40% dropping until 2040. commercial lines could take a larger share, as the marketplace moves towards car sharing and mobility on demand. The potential liability of the software developer and manufacturer will increase too. Increase of liability insurance for maintenance of vehicles by vehicles owner and manufacture.

Impact on Insurance Industry

Changes in the Insurance Industry Changes in procedure for handling claims (documents types and evidence). Underwriting stage will change according to the development of technology (lack of history). Regulatory control over the level of premiums – Difficulties in determining the premium.

Cybersecurity Insurance growing concern for cyber attacks on autonomous vehicles. The risks: Taking control over the vehicle. Collect data about your personal life. Terror attack Is it manufacturer/consumer or state responsibility ? In December 2013 Target was attacked by hackers who stole 110M consumer credit data. Cybersecurity insurance is designed to mitigate losses from a variety of cyber incidents.

Immediate Changes Israeli Gov’t is giving approx. 33% discount on license fee to drivers who install Mobileye safety system. Britain’s Motor Insurance Company is giving 5% discount for customers who activate autopilot system in their Tesla.

What Questions Should Be Asked By The Insurance Market What is autonomous vehicles? (disadvantages, shelf life of parts, etc). requirements regarding maintenance? Which new insurance product will reduce the driver's "moral hazard“?

AIDA XVth World Congress October 2018 Thank you! AIDA XVth World Congress October 2018