Insuring Autonomous Vehicles
Mike Stankard, Managing Director, Automotive Practice, Aon joined Grayson Brulte on The Road to Autonomy podcast to discuss insuring autonomous vehicles.
The conversation begins with Mike sharing his thoughts on the current state of the insurance market for autonomous vehicles.
Overall, it’s pretty healthy.
– Mike Stankard
The right insurance policy for autonomous vehicle companies is absolutely critical. As AV companies move from testing and development to commercialization their insurance needs will change as the risk will change when paying passengers are involved.
The risk profile of that vehicle raises dramatically when you move to that next step.
– Mike Stankard
When AV companies are ready to take the next step and commercialize their service, the insurance markets are comfortable with insuring the risk as the technology has matured. The insurance markets are comfortable with insuring delivery, trucking, and passenger autonomous vehicle companies.
The insurance for autonomous vehicle companies also carries over to directors and officers liability insurance when AV companies decide to go public.
When a private company goes public, the risks that the directors, officers, investors, and other stakeholders are exposed to are substantially increased when you are going to be making a public offering.
– Mike Stankard
If the board of an AV company decides not to go public but instead accepts an offer to be acquired by another company, a new insurance program is developed to manage those risks. Managing risks throughout the lifecycle of an AV company is extremely important as it will ensure that the company is not blindsided by a risk that could be insured.
For AV companies that are younger and are in the process of raising their Series B round, it is important to start a risk management program as the risk profile of the company will change.
One of the biggest risks in a rapidly growing company is attracting and retaining top talent.
– Mike Stankard
The insurance policies that are written for autonomous vehicle companies are bespoke and unique to a company’s operations and overall risk profile. Inside the insurance industry, there are several companies that have dedicated teams focused solely on autonomous vehicles.
In the long run, all humans are going to have interaction with autonomous vehicles.
– Mike Stankard
Having dedicated teams focused on AVs allows the insurance companies to better understand the risk and how to price it. The trend of dedicated teams specializing in this technology will only increase as the technology matures and AV companies increase the size of their deployments.
Wrapping up the conversation, Mike and Grayson discuss the future of the insurance business as it directly relates to autonomous vehicles.
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Recorded on Tuesday, September 7, 2021
