Study Suggests Risk Shift in Fast-Approaching Autonomous Future

Lex Baugh and Gaurav Garg address their study's findings on the future of self-driving cars. Photo by Nick Neville / BU News Service

By Nick Neville
BU News Service

Self-driving cars are expected to become more prevalent in the coming years, and a new AIG study shows that drivers around the world remain split on whether or not they would trust this technology. They are unified, though, in their insistence that manufacturers would face the most risk in an autonomous crash.

In a study detailed at CES Media Day, Lex Baugh, CEO of AIG North America General Insurance, and Gaurav Garg, CEO of AIG Personal Insurance, explained that conventional wisdom about liability will be upended as artificial intelligence and autonomy take on a more crucial societal role.

“Risk will aggregate differently,” Baugh said. “Instead of millions of individuals making decisions, the machine will do a far better job of making the decision.”

That is not to say that autonomy is without safety risk for the consumer. Baugh compared the self-driving evolution to the production of ammonium nitrate as it runs through the chemical process. While it once required three shifts of engineers managing maintenance, the system has evolved. So too will the system of operating a vehicle.

“The chance that something goes wrong is less likely,” Baugh said, “but if it does, it could happen in multiple instances.”

The study surveyed 1,000 driver-age people in the United States, as well as 400 residents of the United Kingdom and 400 Singaporeans. Those in the U.S. and the UK expressed similar regret about sharing the road with a driverless vehicle, at 41 and 43 percent, respectively.

Residents of Singapore claimed significantly less discomfort about sharing the road, at just 29 percent. This could because 91 percent of Singaporeans have experienced some type of ride-sharing, but only 22 percent of U.S. residents have.

Garg understands the qualms from consumers about this future, and believes addressing consumer trust is one of the biggest issues facing the self-driving movement in the coming years.

“Autonomous makers expose different kinds of risks,” Garg said. “These are risks an insurance company would be instrumental to helping match, as the survey points out things like cybersecurity make people nervous about those cars.”

Respondents in all three countries expressed heightened concern over hackers and data security. (Photo by Nick Neville / BU News Service)

Self-driving cars could increase the consumer risk to cyber attacks, and without the appropriate insurance coverage, operating parties could bear the harm. The study reflects fears about this, as 75 percent of adults in Singapore, 75 percent of U.S. respondents and 70 percent in the UK expressed concern about hackers taking control of autonomous vehicles.

The AIG team agreed that it will incumbent upon regulators to help improve the insurance process so that they can stay ahead of trends and keep consumers safe. Baugh said it could take time to rework archaic driver insurance law – in cases of data breaches, hacks and crashes.

“Unraveling the law will be tough,” Baugh said. “You’ll still be in a spot where the first action you take will be against the owner of the vehicle. The law will evolve and come to a different landing, but it’s not the first time this challenge has been put forth.”

According to U.S. responses, drivers believe the risk will fall heavily on the hands of the manufacturer in the case of a fully driverless crash. 50 percent of respondents would place the primary blame on the manufacturer, 37 percent on the software programmer and 8 percent still believe a pedestrian would be at fault for simply not getting out of the way.

On a panel with Baugh and Garg, self-driving experts Robert Peterson of the Santa Clara University School of Law and Kate Sampson, Vice President of Risk Solutions at Lyft, agree that while the risks and concerns are many, the era of the autonomous car is rapidly approaching.

Peterson noted that since Uber was founded in 2009, it has changed perceptions about jumping into a car with a stranger and created a digital system to ensure safety in that realm.

“A new technology in this age can sweep away the status quo almost overnight,” Peterson said. He believes self-driving cars will be in urban areas shortly, though they face lots of regulatory challenges.

Sampson took an even harder line on the movement’s pace. All three locations in the study claimed that the majority of vehicles could be autonomous by 2051, but she is determined that Lyft will have the majority of its rides autonomous by 2021.

She compared the advent of autonomous vehicles to the decline of the horse-drawn carriage, saying, “We are close to – if we haven’t already – hitting peak car.”

“I think this is coming faster than people think,” Sampson said. “The future is here.”

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