Underwriting Autonomous Vehicle Insurance

Sergey Litvinenko, Co-Founder & CEO, Koop Insurance joined Grayson Brulte on The Road to Autonomy podcast to discuss how Koop is reimagining how you underwrite autonomous vehicle insurance.

The conversation begins with Sergey describing Koop.

We are an insurance technology startup that is focused on everything automated. We focus on fully autonomous vehicles that go on public roads like robotaxis, trucks and shuttles to off-road applications in robotics, in agriculture, construction, mining, warehousing, manufacturing and aerial use cases.

– Sergey Litvinenko

For Koop to properly insure their clients, they have developed a proprietary underwriting platform focused on autonomy, filling a void in the market. Today the market for autonomous vehicle/truck insurance is limited with little flexibility as traditional insurers do not truly understand the risk.

The main bottleneck why the insurance industry is not able to innovate at the moment is because the insurance industry cannot get the data that would allow them to build the insurance product around the autonomous vehicle risk.

– Sergey Litvinenko

Koop gathers data such as the technical specs of the autonomy system, exposure data and performance data of the vehicles they insure. With the data Koop can properly price the insurance as they understand the risk better then their competitors.

As Koop primarily operates as an underwriter they work with traditional insurance brokers. Keeping with their theme of being innovative, Koop recently introduced Broker Universe to streamline the process of quoting an insurance policy. What the brokers and Koop deliver together is a high quality insurance offering.

It’s high quality insurance which is going to allow the autonomous vehicle industry to scale. Without high quality insurance, the AV industry will not be able to scale as their risk profile would be to exposed to situations that they can not control, but they can insure against. Furthermore, high quality insurance builds trust with regulators, investors and members of the public.

Trust is what is allowing Cruise, Waymo and Motional to scale operations in multiple cities around the United States. While these AV companies are scaling and generating revenue, analysts are divided over their valuations with one analyst evening assigning a zero value to Cruise.

In my view, in the next ten years, Cruise itself could be worth more then the rest of GM combined. It’s a great move for GM to have Cruise because it could drive more than 50% of the revenue of the company in the near future.

– Sergey Litvinenko

In a September 2022 Bloomberg Intelligence report, an analyst mentioned that Waymo may be able to generate about $5 billion in revenue by 2025. To achieve this number, Waymo might have to license their technology. If they do indeed license their technology, what is the impact on insurance? Sergey goes onto explain how it would work and who is responsible when a crash occurs.

Wrapping up the conversation, Sergey and Grayson discuss the economics of autonomy.