1. Market Regulation Seminar
May 10, 2017

2. Automated Vehicles and Their Potential Impact on Insurance

3. Agenda Key Survey Findings Insurance Considerations
Telematics as applicable to Automated Vehicles
Questions

4. 50% of Senior Management ranked AV to be Highly Important
How important are autonomous vehicles to you when compared to other emerging issues?
50% of Senior Management ranked AV to be Highly Important

5. Which of the following do you think will be the greatest barriers to adoption of autonomous vehicles? (Please select up to two)
Further segmentation of the results show that larger companies believe that regulatory roadblocks are the greatest barriers while medium to small size insurers believe that consumer acceptance will be the greatest hurdle

6. How do you think autonomous vehicles would significantly affect the insurance industry? (Please select up to two)
Which type of laws do you presume will be best poised to address liability for damages related to accidents involving autonomous vehicles?
Many also believe that a hybrid of product liability and traditional auto liability may best address AVs
Many respondents note that a shift of exposure from PL to CL is inevitable thus insurers will need to innovate to reflect the needs of the market

7. How would autonomous vehicles likely affect your business model?
“Alter current product offerings to better account for the risks involved with autonomous vehicles” “Develop other products to supplement traditional auto insurance” “[We’ll] watch the industry respond” “We already created two new business models / units”

8. What potential opportunities do you see from autonomous vehicles
What potential opportunities do you see from autonomous vehicles? (Please select all that may apply)
ISO will be considering potential coverage solutions to help address the changing needs of the insurance market

9. What is your company doing to prepare for the changing landscape in the insurance industry with respect to autonomous vehicles? (Please select all that may apply)

10. When do you anticipate autonomous vehicles will have a significant impact on your business? 
Within 5 Years
6 – 10 Years
11 – 20 Years
Over 20 Years
Professional Staff
24%
48%
23% 5%
Management
19%
52%
Senior Management
13%
40%
37%
10%

11. Top Strategic and Operational Considerations1
Unclear determination of fault or other regulatory/legal issues 2
Security issues such as cyber threats and privacy concerns
Survey participants considered these strategic and operational considerations to be the top priorities related to automated vehicles 3
Unclear future with respect to pricing, underwriting, claims handing, etc. 4
Voluntary assumption of risk by auto manufacturers

12. State Financial Responsibility and Compulsory Insurance Laws
Owner of a car to carry liability insurance
Auto insurance first line of coverage for an injured party

13. Some Insurance Considerations
Gradual adoption of autonomous vehicles
Mix of traditional, semi- autonomous and autonomous vehicles on roads
Consumers understanding of the difference between various new technologies
Traditional vehicles with aftermarket autonomous add-on

14. Automated Vehicles and Telematics
Does UBI for AVs make any sense?
Transitional rating
Manual driving before 100% fully autonomous vehicles are prevalent
Accurate account of manual vs automated usage

15. Automated Vehicles and Telematics
Fully autonomous vehicles in a partially autonomous world
Road-specific risk
Conditions
Driver behavior
Premium could potentially differ by route

16. Questions/Comments?

17. Millennials and Their Potential Impact on Insurance

18. Agenda
Research & Thought Leadership
ISO Millennials Survey
Questions

19. Millennial’s Potential Impact on Insurance
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Millennial’s Potential Impact on Insurance
As Millennials make up about 40% of the US population, their needs and desires as consumers are likely to have lasting implications on the insurance industry. They’ve typically elected a lifestyle that postponnes many significant life decisions…………….

20. Research & Thought Leadership
moving back home
renting in cities
auto/home purchases declining
taking advantage of ridesharing and homesharing
LOVE social media
Millennials are either moving back home with their parents or renting in urban areas. According to census data, roughly 40% of millennial men and women were living at home in In addition, one study found that millennial car purchases declined 30% from
A 2014 survey by Nielson found that 62% of millennials prefer to live in cities, increasing the renters market. The growth rate of US citizens renting increased 600% between 2005 and In contrast, first time home buyers numbers are at their lowest since 2002.
There are many potential reasons for this. It could be their inability to find jobs in a recovering US labor market or their significant student debt.
Some attribute the rise and fall of the dot.com bubble coupled with the great recession to a fear of spending beyond ones means
This has resulted in diminished investment in debt-inducing goods such as cars and homes and provides a great opportunity to utilize ridesharing and homesharing
And of course, social media. I could have written more there but I think you know what im going to say. Social media is extremely influential in the decision making of millennials and portable electronics are important, giving real time updates of anything imaginable.
What does this all mean for insurance? We don’t know yet. Its possible that a decrease in home and auto purchases could have significant impacts on personal lines of insurance. Or that ridesharing, homesharing, social media provide unique opportunities for personal lines carriers to meet this niche demand.

21. What does this all mean for insurance?

22. ISO Millennials Attitudes and Usage Survey: Goals
Research on coverage needs and attitudes was lacking
Surveyed ~600 millennials to investigate:
coverage needs
understanding of insurance contracts and practices
consumer attitudes

23. ISO Millennials Survey: Results
1/3 want to customize coverages

24. ISO Millennials Survey: Results
Many younger millennials plan to obtain insurance in the future
58% plan on obtaining HO insurance, 33% plan on obtaining renters insurance and 40% plan on obtaining auto insurance

25. ISO Millennials Survey: Results
55% of renters do not have renters insurance
Why?

26. ISO Millennials Survey: Results
22% of millennials who don’t own/lease or drive, are interested in named non-owner coverage

27. ISO Millennials Survey: Results
Younger millennials are more concerned with liability and first party property damage while driving than older millennials

28. ISO Millennials Survey: Results
~1/3 are satisfied with the understand- ability of their insurance policy

29. ISO Potential Product Initiatives: Personal Lines Programs
Limited personal property coverage attached to Auto Policy
Additional Named Nonowner coverage options
Updated Renter’s option

30. Questions/Comments?

31. Contact Information
Meghan Alpert
Carly Seaman

32. No part of this presentation may be copied or redistributed without prior written consent of ISO. This material was used exclusively as an exhibit to an oral presentation. It may not be, nor should it be relied on as reflecting, a complete record of the discussion.